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IC INSIGHTS says the microcontroller unit (MCU) market is migrating to 32-bit and ARM-based devices, as they continue to be designed into an expanding range of applications.
Given the expanding use-case for MCUs, market growth in this sector has been relatively stable since the 1980s, compared to many other IC product categories. In 2009, however, a global economic recession hit the MCU market, causing its worst-ever annual sales decline of 22 percent to US$11.1 billion.
In 2010, the market recovered with a 36 percent increase, but then lost momentum.
According to IC Insights, the MCU marketplace in 2012 was convoluted, with unit shipments surging 16 percent, but total revenues declining 3 percent to US$15.2 billion and average selling prices (ASPs) plunging 17 percent.
This price erosion was caused by an intensified competition over the 32-bit microcontroller space. This meant that even though shipments were increasing, dollar-volume sales kept falling.
IC Insights believes the microcontroller market will return to “normalcy” in the next few years. Microcontroller sales are forecast to rise 2 percent in 2013 and reach $15.5 billion with unit shipments growing 10 percent to a record 19.1 billion.
While MCUs will continue to come down in price in 2013, with ASPs dropping 8 percent, this represents an easing of the price pressure.
MCU sales and unit shipments are forecast to steadily gain strength each year between 2014 and 2016 before growth rates substantially slow in 2017.
The future for MCUs lay in not the traditional computer and consumer markets, but in communication applications, automotive electronics, smartcards, medical equipment, home automation, power management and smart metering, solid-state lighting built with light emitting diodes (LEDs), and renewable-energy generation, such as solar systems and wind turbines.
Additionally, the 32-bit segment has become the leader for the MCU market in 2010, signalling an effective trend away from the previously-dominant 8-bit segment.
The difference between 4-/8- and 32-bit MCU sales was just $235 million in 2010, but the size gap has grown much wider since then. The 32-bit microcontroller segment is forecast to reach nearly $6.9 billion in 2013, 57 percent larger than the size of the 4 /8-bit MCU market.
This strength in the 320-bit MCU market is expected to continue due to increasing demand for higher levels of precision in embedded-processing systems and the growth in connectivity using the Internet.
In terms of unit shipments, 16-bit microcontrollers became the largest volume MCU category in 2011, overtaking 8-bit devices for the first time that year. The strength of 16-bit MCUs is due to its use in automotive applications.
Higher-end automotive systems which require even higher levels of intelligence and real-time sensor functions will move to 32-bit.
By 2017, 32-bit MCUs are expected to account for 55 percent of microcontroller sales, while 16-bit devices will represent 22 percent of market revenues and 4-/8-bit will be about 23 percent, based on IC Insights’ forecast.
Additionally, ARM is rapidly penetrating the MCU arena, as its strategy shift eight years ago continues to bear fruit. ARM has established a major position in the MCU market by offering intellectual property (IP) and design technologies that are similar to RISC-core technologies used in most application processors for cellphones and tablet computers.
In response to ARM’s strategies, other MCU market leaders are responding by unifying their MCU architectures, or introducing their own ARM-based controllers.
More information on the MCU market is available in the 2013 edition of IC Insights’ The McClean Report—A Complete Analysis and Forecast of the Integrated Circuit Industry.