Digitalisation Industry Insights

Impact of IoT and Industry 4.0 on electronic component demand in industrial markets

Author: Paige West, Editor, Procurement Pro

The advent of the Internet of Things (IoT) and Industry 4.0 has revolutionised the industrial landscape, heralding an era of connectivity and automation. These technological paradigms have significantly influenced the demand for electronic components, especially sensors, connectivity modules, and smart controllers. Procurement Pro’s Paige West looks at how these components are evolving and their growing significance in the industrial sector. 

Sensors: the eyes and ears of Industry 4.0 

Sensors are pivotal in the context of IoT and Industry 4.0, acting as critical data-gathering tools. They collect real-time information about various physical parameters, such as temperature, pressure, and motion, which are essential for monitoring and controlling industrial processes. The rise of Industry 4.0 has escalated the demand for more sophisticated sensors capable of providing higher accuracy, durability, and miniaturisation. 

The evolution of sensor technology has been marked by advancements in micro-electro-mechanical systems (MEMS) and nanotechnology, enabling the production of smaller, more efficient, and cost-effective sensors. These sensors are not only more sensitive but also consume less power, a crucial feature for battery-operated or remote IoT devices. Moreover, the integration of artificial intelligence (AI) and machine learning (ML) algorithms has facilitated predictive maintenance in industrial settings, reducing downtime and increasing operational efficiency. 

Connectivity modules: the backbone of IoT 

Connectivity modules are the lifelines of IoT, providing the necessary infrastructure for devices to communicate. As IoT gains traction in the industrial sector, there is an escalating demand for robust and reliable connectivity solutions that can operate in challenging industrial environments. 

The development of these modules has been influenced by the need for high-speed data transmission and low latency. Technologies such as 5G, LoRaWAN, and NB-IoT are gaining prominence, offering varying balances of range, bandwidth, and power consumption, suitable for different industrial applications. For instance, 5G technology, known for its high data rate and low latency, is ideal for real-time monitoring and control systems in manufacturing plants. 

Furthermore, the trend towards Edge computing in Industrial IoT (IIoT) has emphasised the need for advanced connectivity modules that can handle on-site data processing, reducing the reliance on Cloud-based systems and enhancing data security and privacy. 

Smart controllers: the brain behind automation 

Smart controllers have become indispensable in the era of Industry 4.0, providing the intelligence required to make autonomous decisions based on sensor inputs. These controllers have evolved from basic programmable logic controllers (PLCs) to more advanced systems integrated with AI and ML capabilities. 

The demand for smart controllers is driven by the need for greater precision and flexibility in industrial automation. These controllers can adapt to varying conditions, optimise processes in real-time, and even predict potential system failures. The integration of AI allows for sophisticated data analysis, enabling controllers to learn from past events and improve operational efficiency continuously. 

In addition, the shift towards distributed control systems (DCS) and supervisory control and data acquisition (SCADA) systems reflects the growing complexity and interconnectivity of industrial operations. These systems provide a holistic view of the plant operations, facilitating better control and coordination across various segments of the manufacturing process. 

The road ahead: challenges and opportunities 

While the demand for advanced electronic components in the industrial sector offers significant opportunities, it also presents certain challenges. One of the primary concerns is the increasing complexity of supply chains, necessitating effective management to ensure the timely availability of components. Furthermore, the rapid pace of technological advancement requires continuous investment in research and development to stay ahead of the curve. 

Moreover, as industries adopt these advanced technologies, there is a growing need for skilled professionals who can manage and operate these sophisticated systems. This necessitates significant investment in training and development to build a workforce capable of handling the demands of Industry 4.0. 


The impact of IoT and Industry 4.0 on the demand for electronic components in the industrial sector is significant. Sensors, connectivity modules, and smart controllers are undergoing rapid evolution to meet the increasing requirements of modern industrial applications.  

As the industrial sector continues to embrace these advancements, the electronic component market is poised for significant growth, driven by the ever-increasing demand for smarter, more connected, and efficient systems.