This market research report was originally published at the Yole Group’s website. It is reprinted here with the permission of the Yole Group.
Mainland China is growing its microcontroller (MCU) market share and seeing an increase in emerging suppliers. How is the market adapting?
OUTLINE
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The microcontroller market is expected to reach US$38.8 billion by 2029, with a 5.5% CAGR23-29.
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European MCU suppliers lead the market, whereas Mainland China is experiencing significant growth.
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Technical trends: while high performance is significant energy efficiency remains the key priority.
The disruptions in the supply chain due to the pandemic, coupled with foundry capacity shortages and stockpiling, significantly increased ASPs , which increased from around US$0.60 in 2020 to US$0.93 by 2023. Although the supply chain has largely stabilized and just-in-time ordering returned by the end of 2023, ASPs have failed to revert to pre-pandemic levels. However, the rise of new suppliers, especially from Mainland China, supported by government incentives, has ignited price wars. This has helped mitigate the surge in ASPs caused by previous supply chain issues, though prices are unlikely to return to pre-pandemic levels anytime soon.
“The primary reason prices remain elevated is product substitution. A long-term trend has been the shift toward more expensive 32-bit MCUs over their 16-bit and 4/8-bit counterparts, as many designers transition to the more robust and standardized 32-bit Arm ecosystem.”
Tom Hackenberg
Principal Analyst, Computing and Software, Yole Group
Furthermore, advancements in MCU performance, such as cutting-edge process nodes, the replacement of lower-cost smartcard MCUs with more sophisticated secure MCUs, and the growing demand for high-reliability-class MCUs over multimarket, have contributed to maintaining higher prices, adds Tom Hackenberg. These substitution patterns have slowed any significant price reductions.
In its new Status of the Microcontroller Industry 2024 report, Yole Group provides an overview of the microcontroller market for businesses, institutions, and individuals seeking actionable data for critical decisions. This study includes long-term forecasts and an in-depth analysis of technology trends and major market drivers, complementing Yole Group’s quarterly analysis, the Microcontroller Market Monitor.
The MCU report delves into the competitive landscape, offering insights into market leaders and mid-sized suppliers serving small to mid-sized OEMs. It includes a comprehensive list and company profiles of the leading MCU suppliers.
Without doubt, prices are gradually declining, with projections suggesting they could drop to around US$0.88 in the coming years. Beyond the shifts in product mix within the MCU market, global inflation has pushed up costs across all sectors. The combination of supplier-driven price competition, inflationary pressures, and product substitution has resulted in a relatively stable environment for MCU ASPs, with prices expected to fluctuate around US$0.90 through 2029.
Leading MCU designers such as Infineon Technologies, Renesas, and NXP remain closely competitive, with only minor differences between them. NXP continues to dominate the automotive MCU market. As the COVID-19 pandemic shifts into an endemic phase, MCU suppliers have been adjusting their global strategies. The competitive landscape has stayed relatively stable, with a growing number of smaller suppliers, particularly from Asia. Major Chinese OEMs have entered the semiconductor field, focusing strongly on MCU manufacturing. Their expansion is driven by increasing demand in areas like smart home ecosystems, the automotive industry, and the integration of AI across various applications. These companies are actively engaged in chip design to enhance supply chain control, and their in-house MCU development efforts are fostering greater self-reliance. Notable investments have bolstered the positions of these firms, with BYD Semiconductor, China’s top MCU manufacturer, standing as a prime example.
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Acronyms
- ASP : Average Selling Price
- MCU : Microcontroller (Unit)
