Status of the Microcontroller Industry 2023

The Automotive sector will continue to be a significant driver of MCU revenue

Despite a robust end to 2022, the MCU market anticipates a dip in 1H 2023, recovering gradually in 2H, with replacement cycles linked to pandemic-driven spikes. Inflation and global conflicts persist, yet signs of potential recession diminish. A modest decline to $22.9 billion in MCU revenue is projected for 2023, with a CAGR forecast of 5.3% (2022-2028). While 2023 sees challenges, a reduction in inflation and pent-up demand is expected to spur growth, reaching around $32 billion by 2028. The 2023 ASP is projected to slightly increase, maintaining an all-time high throughout the year before a gradual decline in 2024 with the 2022-2028 ASP CAGR is 2.3%. The Automotive sector will continue to be a significant driver of MCU revenue in 2023, leading to an increase in the overall ASP. Meanwhile, Industrial & Other applications will maintain a consistent share, while Smartcard/Secure MCUs are expected to grow, driven by robust embedded security trends. However, the Consumer segment will experience a slight decline, and Personal Data Processing will decrease, primarily due to limited equipment replacement rates. Furthermore, it appears that previous supply chain challenges in the MCU market have been resolved.

EMEA MCU suppliers dominate the market however strong rise is seen in mainland China

Leading MCU designers, including Infineon, Renesas, and NXP, are engaged in a close competition, with minimal differences among them. NXP maintains its dominant position in the Automotive MCU market. As the COVID-19 pandemic transitions to an endemic phase, MCU suppliers have been adapting their strategies on a global scale. The competitive landscape remains stable, with a growing number of small suppliers, especially in Asian markets. Major Chinese OEMs have entered the semiconductor industry, with a particular focus on MCU manufacturing. Their growth is driven by the increasing demand for smart home ecosystems, the automotive sector, and the adoption of AI in various applications. These companies are actively involved in chip design to enhance supply chain control. Furthermore, in-house MCU development enables self-sufficiency. Significant investments have been made to strengthen the positions of these companies, exemplified by BYD Semiconductor, the leading MCU manufacturer in China.

Energy efficiency remains the primary characteristic while there is a drive for high performance

The rise of edge computing and the Internet of Things (IoT) has led to increased demand for more powerful hybrid MCUs as an alternative to complex System-on-Chips (SoCs) and Microprocessor Units (MPUs). Multi-core processors are becoming more prevalent, with high-performance MCUs accounting for 30% of MCU market revenue. Surprisingly, despite predictions of obsolescence, 4/8/16-bit MCUs are expected to continue growing alongside the faster-growing 32-bit class, as the price-efficiency gap narrows. These simpler MCUs are still popular for cost-effective, low-power solutions in specific applications. MCUs are advancing into the realm of advanced nodes, driven by the need for superior performance, efficiency, and integration. This transition offers a choice between microprocessors and MCUs, aligning energy efficiency with advanced nodes to meet the demands of emerging technology. In the realm of non-volatile memory, scaling challenges have emerged for eFlash (embedded Flash) below 28nm, leading to cost challenges. This has prompted exploration of alternative embedded Non-Volatile Memories (eNVMs) such as PCM, RRAM, and MRAM. These eNVMs show promise for higher densities and efficiency and are being adopted by leading players from 28/22nm down to 16nm, with future roadmaps aiming for scales below 10nm. MCU packaging has traditionally been dominated by architectures such as Wire Bonding and Flip Chip, with only a small segment transitioning to Wafer Level Packaging. In the domain of open-source architectures, RISC-V is challenging ARM's dominance in embedded core IP. Over the next five years, RISC-V is expected to grow rapidly and while it may not replace ARM, it will slow ARM's growth, particularly affecting mature or legacy technologies first. The transition to RISC-V carries costs, such as developing new skills and managing third-party dependencies.

3-Page Summary

Executive summary

Microcontroller market – overview

MCU Market forecast

• MCU Class – Market Forecast

MCU – Market Overview

• Automotive & Mobility Market
  • Automotive Market
  • Mobility Market
• Mobile & Consumer Market
  • Consumer Market
  • Personal Data Processing
• Telecommunications and Infrastructure
  • Telecommunications Infrastructure Market
  • Enterprise Data Processing
• Industrial Market
  • Smartcard & Embedded Secure
  • Industrial and Other
• Defense & Aerospace Market
• Medical Market

Ecosystem and supply chain

• MCU Supplier Ecosystem
• Focus on China
• MCU Suppliers – Share Rankings
• MCU Manufacturing – Market Size and Share

Technology trends

• MCU Technology Trends
• Manufacturing & Packaging Trends

Conclusion

Appendix – Glossaries and definitions

Abov, Actions ,ALIF Semiconductor, Ambiq Micro, Analog Devices, AppoTech, ASR Microelectronics, Autochips, Arm, Broadcom, BYD Micro, CEC Huada Electronic Design Co, Ltd, China Resources Microelectronics (CR Micro), ChipOn, CML Microsystems, EastSoft (eesemi), Elan Microelectronics, EM Microelectronic, Epson, Espressif, Flagchip, Fortier Tech, Geehy, Giantec Semiconductor, GigaDevice, Guoxin Microelectronics (Unigroup), Holtek Semiconductor, Honeywell, HP, Micro Shanghai Xianji, Infineon Technologies, IXYS (Littelfuse), Microchip Technology, Mikron, Nanjing Quinheng Microelectronics (WCH), Nations Technologies (Nationz), Nordic Semiconductor, Nuvoton Technology, NXP, Nyquest, Onsemi, On-Bright Electronics, PHY+, Puya, Quicklogic, Renesas Electronics Corporation, RISC-V International, ROHM, Samsung Electronics, Shanghai Belling, Shanghai Fudan Microelectronics, Silan Microelectronics, Silicon Laboratories Inc, Sino Wealth, Skyworks Solutions, SONiX, STMicroelectronics, Sunplus IT, Texas Instruments, Tsingoal, Ultrasense, UniSoC, Weltrend Semiconductor, Winbond and more.

Key Features

• Description of technical trends, scaling roadmaps, and players’ dynamics with a special focus on China.
• Breakdown of the MCU market by application segmentation and MCU class, detailing present and future needs for markets related to Automotive and mobility, .Mobile and consumer, Enterprise data and Telecommunication, Defence and Industrial and Smart Card ecosystems.
• Mapping of the MCU ecosystem, talking about supplier ranking and revenue and list of noteworthy news.
• Overview of the MCU manufacturing ecosystem which a focus on foundries and IDMs and their relationship with each other.
• Overview of packaging in MCU with an introduction to advanced packaging and its supply chain and memory innovation for MCU due to scaling issues of eFlash.

Product objectives

The purpose of this report is to provide a thorough presentation of the market for microcontrollers to companies, institutions and individuals that need detailed actionable market data for key business decisions. As a complement to our ongoing Microcontroller Market Monitor, this report will provide long range forecasts rather than quarterly tracking. It also provides more detailed discussion of technology trends and important long-term market drivers.

This report includes an extensive Excel database accompanying this presentation including class, market and region organized tables and pivot tables. This presentation provides context and analysis of the trends that drive overall class and individual markets. This report includes vertical market, manufacturing, design, regional, and ecosystem trends.This report provides context to the competitive landscape including overall, class and market leaders as well as a discussion of key characteristics of mid-sized suppliers that play a role with small and mid-sized OEM customers. It provides an exhaustive list of MCU suppliers and profiles the leading MCU suppliers.