YG PRESS NEWS – Microcontroller industry: resilient growth amidst global challenges

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MCU market growth persists despite inflation spike and recession concerns.

  • The MCU market thrived in 2022, achieving a remarkable annual revenue growth rate of 25%.
  • Microcontrollers constitute the largest segment within the processor market, accounting for over 80% of all processors.
  • The MCU market resisted the price declines, maintaining levels significantly above those observed before the pandemic.
  • Although 2024 is anticipated to exhibit modest single-digit growth, the MCU market holds promising long-term potential, with projections of robust single-digit to low double-digit annual revenue growth extending through 2028 and beyond.

According to Yole Intelligence, part of Yole Group, in the Microcontroller (MCU) Market Monitor, despite the significant surge in global inflation during 2022 and numerous warnings from financial institutions about a potential recession, the MCU market thrived in that year. It experienced an impressive annual revenue growth of 25%, largely due to the resolution of supply chain imbalances and a shift in consumer spending patterns from services to equipment markets. Although many suppliers had concerns about overstock earlier in the year, the demand surpassed expectations, leading to substantial growth in the second half of the year, before the impact of inflation became pronounced.

In contrast to the rest of the semiconductor industry, which faced challenges such as a sharp decline in consumer spending and oversupply issues resulting in lower average selling prices and revenues, the MCU market resisted price drops and maintained levels significantly higher than those seen before the pandemic. The first-quarter decline of 7% was only slightly worse than the typical seasonal drops, and the market rebounded with a 3% increase. It is anticipated to continue this upward trajectory, aiming for a flat growth rate in 2023. The prospects for 2024 also indicate low-single digit growth, while the long-term outlook for the MCU market appears particularly promising, with high single-digit and low double-digit annual revenue growth anticipated through 2028 and beyond.

Key drivers in this market include the shift toward electrification and advancements in vehicle networking and advanced driver assistance systems, which are fueling robust growth in the automotive electronics sector—the MCU market’s largest segment. MCUs continue to play a critical role in vehicle safety and security, meeting the growing demand for connected vehicles and evolving user experiences. Mainland China’s expanding presence in the automotive industry, especially domestically, presents opportunities for new entrants and expansion in automotive MCU supplies in that region.

In various markets, including automotive, the continuous growth of connected devices and the emphasis on developing more intelligent edge devices have generated demand for higher-performing MCUs, integrated wireless subsystems, and security engines. The emergence of secure MCUs represents a significant shift in MCU technology trends. While traditional SIM cards for smartphones are dwindling, along with smartcard MCUs, embedded SIM (eSIM) technology is not only replacing traditional SIM cards but is also expanding into various applications for connected devices, including Trusted Platform Modules for PCs.

These trends in edge computing are expected to drive not only demand but also sustain average selling prices, reinforcing the MCU market’s position… For more information about this analysis, please contact us!

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