A microcontroller (MCU) is a ubiquitous semiconductor IC, present in numerous embedded applications. A typical MCU chip comprises a processer, core, memory and programmable input/output peripherals. Microcontrollers are smaller and cheaper than microprocessors, which makes it economical to control many devices and processes digitally. They are used primarily in devices that require a considerable degree of control exerted by the user. The rapidly growing automotive industry is expected to be a key driver for the market over the forecast period. Additionally, high degree of competition in the industry has resulted in price cuts, which is expected to further boost market growth. Besides automotive, the industrial segment is a crucial contributor to the overall market. There is a growing need for flexibility and agility in the industrial ecosystem owing to decreasing product life-cycles. The consumer electronics market has also witnessed significant growth due to innovative technical developments. MCUs are incorporated in numerous consumer electronics devices, which is expected to augment the growth of the MCU market. Increased demand for devices supporting Internet of Things (IoT) and Ethernet is also expected to favorably impact microcontrollers demand over the next six years. The demand for microcontroller chips integrated with wireless interface such as Bluetooth, ZigBee and NFC has also witnessed growth. However, the moderately fragmented nature of the industry and unfavorable macroeconomic conditions are expected to decelerate market growth over the forecast period. The global market was estimated to be 17,393.6 million units in 2013, and is expected to reach 39,108.5 million units by 2020, growing at a CAGR of 12.3% from 2014 to 2020. In terms of revenue, the market was valued at USD 16,697.9 million in 2013 and is expected to reach USD 26,984.8 million by 2020, growing at a CAGR of 7.3% from 2014 to 2020.
Microcontrollers are classified on the basis of internal bus width into 4/8-bit microcontrollers, 16-bit microcontrollers and 32-bit microcontrollers. The 32-bit microcontrollers segment dominated the market in terms of revenue share and accounted for over 34% of the market revenue in 2013. It is also expected to be the fastest growing segment over the next six years. 32-bit microcontrollers have witnessed increased popularity owing to reduction in unit prices. They are embedded in devices requiring higher processing capabilities as they are adept at performing complex control operations. The 16-bit microcontrollers segment followed the 32-bit microcontrollers segment in terms of market share in 2013 accounting for close to 30% of total market revenue in 2013. They are used in applications requiring faster processing speeds and greater power requirements such as automotive, air conditioning, refrigeration, factory automation medical applications and others.
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Key application segments include automotive, consumer electronics, industrial and other applications such as computers and communications. Automotive emerged as the leading application segment and accounted for over 30% of total market volume in 2013; it is also expected to be the fastest growing segment in the forecast period. A large number of MCUs are used to achieve emission control and fuel efficiency in hybrid electric vehicles. These vehicles offer a plethora of environmental benefits and are gaining popularity, consequently driving the demand for microcontrollers. The industrial sector followed the automotive sector in terms of total revenue share in 2013. In this sector, microcontrollers enable industrial automation supporting advanced sensors and extensive feedback control mechanisms.
Asia Pacific dominated the market in 2013 and accounted for over 35% of the market in terms of volume as well as revenue. It is also expected to exhibit the highest growth rate of 7.8% from 2014 to 2020. This can be attributed to increased demand for automobiles and consumer electronics in this region. Outsourcing within this industry has also increased in the Asia Pacific region, resulting in decrease in price of some of the expensive 16-bit and 32-bit chips. The EMEA region followed Asia Pacific in terms of revenue in 2013.
The market is moderately fragmented in nature. Presence of a large number of participants in the market is expected to increase competition driving price cuts as industry players are forced to provide cost-efficient, low-power devices in order to sustain their buyer base. Key microcontroller manufacturers include Renesas Electronics Corporation, Microchip Technology, Inc., Texas Instruments, Atmel Corp., Dallas Semiconductor, Freescale Semiconductor, Fujitsu Semiconductor, National Semiconductor, STMicroelectronics, Infineon Technologies, Samsung Semiconductor, Fairchild Semiconductor, Intel Corp., ZiLog, Silicon Labs, and Analog Devices among others.