The MCU industry: What is driving $32B revenue growth by 2028?
With $15B+ in investment since 2021, advanced substrate is now in a 5-year growth cycle, supported by GPUs and AI accelerators, data center and cloud computing, as well as the spread of HBM. With $34B in 2028, advanced substrates provide another integration path in addition to front end and advanced packaging.
The overall sentiment is a small decline to $22.9 billion in MCU revenue for 2023. Meanwhile, revenue CAGR22-28 has been raised to a forecast of 5.3%, with an MCU revenue in 2028 around $32B. Automotive should continue climbing to almost 39% of all MCU revenue in 2023, bolstering overall ASP. Industrial & other should remain at 24%. The rise of edge computing and IoT has spurred demand for more powerful hybrid MCUs as an alternative to complex SoCs and MPUs. Multi-core processors are on the rise, but high-performance MCUs constitute only 30% of MCU market revenue, with the remaining 70% focused on low-power features.
eFlash, which is predominantly used in MCUs, is facing scaling issues below 28nm due to additional masks, leading to cost challenges and driving exploration of new embedded NVM alternatives. PCM, RRAM, and MRAM have emerged as promising replacements for eFlash in MCUs, enabling higher densities and efficiency. The leading players are adopting these emerging NVMs from 28/22nm down to 16nm, with future roadmaps reaching below 10nm scales.
While there is growing interest in the open-source RISC-V architecture challenging ARM’s dominance in embedded core IP, RISC-V is still an emerging player facing challenges. It received a boost from Nvidia’s failed ARM acquisition attempt and the U.S. trade sanctions against China, encouraging investment in RISC-V alongside ARM offerings. Finally, major Chinese OEMs are entering the semiconductor industry, particularly focused on MCU manufacturing. Growth is propelled by smart home ecosystems, automotive demands, and AI adoption. Substantial investments, as seen in BYD Semiconductor and CEC Huada (the leading MCU manufacturer in China), are strengthening market positions.
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