IoT Microcontroller (MCU) market size is expected to reach USD 3,561.7 million by 2022. The rise of the internet of things era has instigated an incessant demand for innovative products, which has placed pressure on systems designers to deliver breakthrough solutions consistently. Microcontroller miniaturization provides a platform for system designers that primarily include use-cases for new emerging applications. This growing web for connected devices encompasses smartphones, televisions, tablets, home appliances, gaming consoles, smart meters, security systems, and is anticipated to impact positively the IoT microcontroller demand.
U.S. IoT microcontroller market by application, 2012 - 2022 (USD Million)
One key challenge that might withhold the proliferation of IoT MCU is power consumption. Almost all intelligent connected devices include billions of sensors, and some way or the other heavily rely on batteries for power. These batteries are expensive, toxic to the environment and need high maintenance. Therefore, microcontroller suppliers focus on introducing energy harvesting solutions/designs that are expected to eliminate the need for fixed power sources in these devices.
Security is another factor that may negatively impact demand for the internet of things applications, on account of which suppliers focus on developing out of the box solutions without complex network set-up and gateways and/ or VPNs (Virtual Private Network).
The technology is witnessing advancements, and a few initial investments in this sector are paying off profitably, with the development of advanced wearable devices, smart thermostats, smart home systems, etc. The industry is poised for higher gains over the forecast period, with numerous innovations and commercialization of an array of products ranging from sensors in automobiles to advanced medical monitoring systems.
Consumer electronics dominated the demand in terms of revenue and witnessed a growth of a CAGR more than 9% from 2015 to 2022. IoT microcontroller market growth has been significantly fuelled by increasing adoption of smart wearables, including wrist wear, eyewear, ear wear, etc. Products ranging from smart watches to wellness devices, wearable electronics provide a new growth platform for the exploding IoT market. Growing popularity of these devices has created an optimistic market for semiconductor manufacturers, a trend which is expected to hold true over the forecast period future.
Penetration of 32-bit microcontrollers is high compared to 8 and 16-bit microcontrollers in the internet of things applications. The segment accounted for over 30% of the overall market share in 2014. These processors provide data throughput, reading sensors and send real-time sensor data over an IP-based network. Several companies such as Silicon Lab, Microchip, Atmel provide these processors for the internet of things application along with their 16-bit models owing to high RAM size and better performance. Further, the price difference between 8-bit, 16-bit and 32-bit processors is very low, which may also instigate buyers to opt for high performing 32-bit products.
Although emerging markets such as China and India are likely to witness significant growth, North America is anticipated to lead the market in terms of revenue, and is expected to exceed USD one billion over the forecast period. The proliferation of connected devices is key factor expected to impact positively the regional market demand. The technology has experienced high penetration in North America owing to extensive technological advancements and presence of several key manufacturers pioneering the adoption of MCU supporting IoT devices
The semiconductor industry is anticipated to benefit with the IoT expansion over the foreseeable future. Therefore, semiconductor manufacturers are focusing on investigating opportunities associated with IoT more closely along with any risks that may derail the progress. Although these products pose high growth avenues, there are companies that still hesitate to make high investments in this sector. The key issue, in this case, is that products within the IoT arena, appeal mostly to niche markets, and might generate low sales and volumes. Atmel Corporation, ARM, NXP Semiconductors, Microchip Technology Inc, Broadcom Corporation, Infineon Technologies, Texas Instruments, STMicroelectronics and Silicon Labs are few key companies operating in this market.
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The global electronics devices market (including consumer electronics and industrial electronics devices) is expected to be impacted significantly by COVID-19 as China is one of the major suppliers for the raw materials (used to manufacture devices) as well as the finished products. The industry is on the brink of facing a reduction in production, disruption in supply, and price fluctuations. While this can vastly encourage local manufacturers to step up and address the growing demand, the scarcity of raw material can still pose a challenge to this industry. The sales of prominent electronic companies is expected to be affected in the near future. The report will account for Covid19 as a key market contributor.