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MCU market recovers in 2014

Posted: 21 Aug 2014 ?? ?Print Version ?Bookmark and Share

Keywords:IC Insights? MCU? Internet of Things?

IC Insights has reported that microcontroller (MCU) sales this year are seen to grow six per cent, to $16.1 billion, a record high, followed by increases of seven per cent and nine per cent in 2015 and 2016, respectively. Shipments are also expected to post healthy gains, climbing 12 per cent, to 18.1 billion units in 2014.

A full-blown recovery in the MCU sector is underway as sales to industrial and automotive customers rebound amidst the upturn in the global economy. And it isn't confined to just the 32bit market.

The 8bit sector is also experiencing such tremendous growth that one supplier, Microchip Technology Inc. has had to quickly step up efforts to ramp manufacturing. "Demand for our innovative new 8bit MCU products introduced over the last three years have been so strong, it has outstripped our ability to ramp manufacturing fast enough," said Ganesh Moorthy, COO of Microchip.

The better-than-expected outcome was endemic across much of the MCU industry in the second calendar quarter, a trend that is likely to continue over the next couple of years.

The market research firm actually raised its forecast from three per cent, partly due to a spike in smartcard MCU shipments, which account for nearly half of all MCUs shipped worldwide. After a market correction and intense pricing competition pushed sales down 12 per cent last year, smartcard MCU sales are expected to grow 19 per cent this year. In addition, shipments are projected to climb 20 per cent, to 8.7 billion units, according to the report.

"The market outlook is positive and we are seeing an increase in demand creation activity," said Ritesh Tyagi, VP of marketing for Renesas Electronics America Inc.

For Renesas, the 32bit MCU sector is experiencing the most growth as the build-out for the Internet of Things applications takes off. He also cited strong demand for connected smart devices and the "exploding application or 'apps' economy."

"Customers are realising that the CPU core is not that important; it is the peripheral mix that differentiates the controllers," Tyagi noted. "Hardware engineers are not making decisions based on the bit size or the core. They are more often considering the integration and code reusability of any 8, 16 or 32bit platform in their decision-making process."

Still, the 32bit iteration is the sweet spot of the market as suppliers aggressively push these advanced parts as price points come down low enough to be cost-competitive with both 8 and 16bit devices, according to the report. Between 2013 and 2018, 32bit MCU sales are forecast to grow by a CAGR of 9.5 per cent, reaching $11 billion in 2018.

"The gap between 8bit and 32bit MCUs is decreasing significantly," Tyagi said. "It is more likely that a customer will find the tangible justifications to use a 32bit MCU across the board."

However, Tyagi admits that there are plenty of applications in which designers prefer low cost and minimal software complexity, making an 8bit MCU with a low pin count and memory a more attractive option.

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