Microcontroller sales kick into gear again after slump

With the global economy stabilising, steady improvements in overall demand and a strong recovery in the smartcard market segment, microcontroller sales are set to reach a new high of $16.1bn, according to IC Insights’ new mid-year update to the 2014 McClean Report.

Smartcard MCU sales fell 12% in 2013 but are now on track to grow 19% in 2014, based on the forecast in the new report. Overall MCU sales are forecast to strengthen in 2015 and 2016 with 7% and 9% increases, respectively, due to improvements in the global economy and the emergence of new applications, such as wearable systems and the build-out of the Internet of Things (IoT).

The microcontroller market is projected to reach new record-high sales each year in the forecast period, with the exception of 2017, when the market is expected to dip by 1% due to the next anticipated economic slowdown. The MCU sales are expected to reach $19.1bn in 2018.

After declining 7% in 2013, worldwide microcontroller shipments are now forecast to climb 12% in 2014 and reach a new record-high 18.1 billion units this year, thanks to a strong rebound in 8- and 32-bit smartcard microcontrollers for electronic banking, automatic teller machines (ATMs), secure credit and debit cards, mass-transit fares, government IDs and security applications. A market correction and intense pricing competition in smartcard MCUs undercut total microcontroller unit and sales volumes in 2013.

Smartcard MCUs represent nearly half of all microcontrollers shipped worldwide but generate less than 20% of the total dollar sales volume due to their ultralow average selling price.

IC Insights’ update shows smartcard MCU shipments rising 20% in 2014 to 8.7 billion units after a 23% drop in 2013. The rest of MCU units - serving a wide range of embedded functions in systems - are forecast to increase 6% to 9.4 billion devices in 2014 after rising 12% in 2013.

Overall, an explosion of 32-bit microcontroller shipments is reshaping the market as suppliers aggressively promote more powerful MCU designs that are cost competitive with 8- and 16-bit devices.

In some cases new 32-bit MCUs are being priced well under $1, in high-unit volumes, and below the cost of 8-bit microcontrollers. Between 2013 and 2018, total 32-bit MCU sales are expected to grow by a CAGR of 9.5%, reaching $11 billion in 2018. IC Insights’ Mid-Year Update shows 4/8-bit MCU sales falling by a CAGR of 1.3% to $3.7 billion in 2018 while 16-bit revenues will barely grow at an annual rate of 0.3%, remaining at $4.2 billion in five years.

Additional details on sales, unit shipment and pricing trends for microcontrollers as well as 32 other IC product types are provided in IC Insights’ Mid-Year Update to its 2014 McClean Report - A Complete Analysis and Forecast of the Integrated Circuit Industry.