Microcontroller market size in 2013 was valued at over USD 16.5 billion, and is expected to reach approximately USD 27 billion by 2020. The growth may be attributed to increasing number of IoT-based application that needs high processing speed and interconnectivity. A microcontroller (MCU) is an integrated circuit, embedded in several products that need automation. A typical MCU chip consists of semiconductor components including processers, cores, memories and programmable IO peripherals.
MCUs are smaller and cheaper than microprocessors, which makes it economical to control many devices and processes digitally. They are used in devices that need a high degree of control exerted by the user. Rapid development in automobile industry is expected to be a key driver over the forecast period. High degree of competition in the industry has resulted in price cuts, leading to reduction in profit. In addition to automotive sector, increasing demand from industrial sector is anticipated to contribute towards the future growth. Surging need for flexibility and agility in the industrial ecosystem may also provide avenues for further growth. Use of technologically advanced Human Machine Interface (HMI) terminals is also estimated to increase demand over the next six years.
Consumer electronics is estimated to witness significant growth due to innovations in the field of displays, access control, design, security, and personalization. Smartphone proliferation across several developing region such as Asia Pacific and Middle East & Africa is anticipated to increase industry demand over the forecast period. Growing demand for devices that supports Internet of Things (IoT) technology is also estimated to surge demand over the next six years. Several wireless devices such as bluetooth, zigbee and NFC chips also use microcontrollers in order to automate processes such as file transfer, tap-to-access, tap-to-pair and tap-to-pay. However, the raw materials used to make components used in MCU are rare earth metals and are very difficult to obtain, which may hamper industry expansion. Increasing awareness about e-waste recycling in order to recycle rare earth metals may further provide growth avenues over the forecast period.
North America microcontroller market by product, 2012 – 2020 (USD Million)
Microcontrollers are categorized into 4/8-bit, 16-bit and 32-bit chips on the basis of internal bus width. The 32-bit segment is expected to dominate the industry in terms of revenue share and witness substantial growing segment over the next six years. Decreasing cost of 32-bit MCU owing to increasing competition is expected to increase its popularity. They are embedded in devices that need high processing capabilities as they are highly adapted to perform substantially complex operations.
16-bit chips are used in applications the need high processing speeds and power such as air conditioning, automotive, factory automation medical applications, and refrigeration. 4/8-bit are primitive and being replaced slowly by 16-bit and 32-bit counterparts.
Key application segments include automotive, consumer electronics, industrial and other applications such as computers and communications. Automotive emerged as the leading application segment owing to increasing automation and growing adoption of electric vehicle in developed regions such as North America and Europe. Hybrid electric vehicles use MCUs for emission control in countries with stringent emission control regulations. These environmental benefits may further increase the product sale over the next few years.
In the industrial sector, the microcontroller market is expected to witness substantial growth owing to growing need for industrial automation that supports advanced sensors and extensive feedback control mechanisms. Further, surging use of touchscreen-based HMI terminals to remotely manage automation process is also estimated to catapult demand over the forecast period.
Consumer electronics is also expected to witness high growth owing to growing use of IoT technology. MCUs also increase energy efficiency by tracking the usage and automatically reducing energy usage when not in use. They are also used to incorporate several intuitive features such as touchscreen, touch-to-connect, personalization, and customization. Further, growing adoption of smartphones and tablets is anticipated to catapult product demand over the next few years.
Asia Pacific MCU market is expected to dominate the industry owing to high proliferation of consumer electronics. This can also be attributed to the growth of the automobile sector in the region. Outsourcing the manufacturing and assembling activities of several electronic devices and automobiles in Asia Pacific may also increase in demand for 32-bit and 16-bit chips. High proliferation of automotive sector in European region is also expected to exhibit considerable share.
Competitive Market Share Insights
There are high numbers of players in the MCU industry, with several large foundries. This may increase the competition which may instigate players to reduce prices in order to provide cost-efficient, ultra low-power device in order to increase customer base. Key microcontroller manufacturers include Analog Devices, Atmel Corp., Dallas Semiconductor, Fairchild Semiconductor, Fujitsu Semiconductor, Infineon Technologies, Intel Corp., Microchip Technology, Inc., National Semiconductor, Renesas Electronics Corporation, Samsung Semiconductor, Silicon Labs, STMicroelectronics, Texas Instruments, and ZiLog.