IC Insights forecasted that combined O-S-D sales growing 5% in 2016 to a new record-high $70.2 billion, after increasing just 3% in 2015 to the current annual peak of $66.6 billion. O-S-D revenues accounted for nearly 19% of the semiconductor industry’s $353.7 billion sales total in 2015 versus about 81% coming from ICs, according to IC Insights’ newly released report.

Total O-S-D revenues continued to outgrow the larger integrated circuit market, which dropped 1% last year to $291.5 billion, primarily because of the weak global economy and a 3% decline in memory IC sales. O-S-D’s share of 2015 semiconductor sales was the highest it has been since 1988. IC Insights expects the O-S-D marketplace to account for 20.0% of total semiconductor sales in 2020.

On the strength of optoelectronics and sensor products—including CMOS image sensors, high-brightness light-emitting diodes (LEDs), and devices built with microelectromechanical systems (MEMS) technology—total O-S-D sales have outpaced the compound annual growth rate (CAGR) of ICs since the mid-1990s. IC Insights’ new report shows this trend continuing in the next five years.

The 2016 O-S-D Report says modest improvements in the global economy, steady increases in electronic systems production, and new end-use applications—such as wearable systems and connections to the Internet of Things (IoT)—are expected to collectively lift the three O-S-D market segments by a CAGR of 6.5% between 2015 and 2020 compared to a projected 4.9% annual growth rate for IC sales in the second half of this decade.

During 2015, the O-S-D marketplace was a mixed bag of double-digit growth in most optoelectronics products and sales declines in discretes and a number of large sensor categories. Optoelectronics sales grew 11% to a record-high $35.2 billion in 2015 while the discretes market suffered its worst decline since the 2009 semiconductor downturn year, falling nearly 8% to $21.2 billion, says the new O-S-D Report.

The sensors/actuators market increased about 4% in 2015 to a record-high $10.2 billion, with steep price erosion in accelerometers, gyroscope devices, and magnetic-field sensors dragging down overall growth in this semiconductor segment, according to the report. In 2016, optoelectronics sales are expected to increase 9% to $38.2 billion, while sensors/actuators revenues are forecast to rise again by 4% to $10.6 billion, and the commodity-filled discretes market is projected to grow just 1% this year.

Between 2015 and 2020, all three O-S-D market segments are forecast to expand by more normal annual dollar-sales growth rates—with optoelectronics rising by a CAGR of 8.3%, sensors/actuators increasing at a rate of 5.6%, and discretes being up by a CAGR of 3.5%.