Microcontroller (MCU) sales are forecast to increase six percent in 2014, reaching a new record high of $16.1 billion after flat growth in 2013 and dropping three percent in 2012, according to IC Insights’ new Mid-Year Update to the 2014 McClean Report. IC Insights raised its growth forecast for MCU sales in 2014 from three percent due to improvements in overall MCU demand, a strong recovery in the smartcard market segment, and a stabilizing global economy. Another contributing factor is emerging applications including the Internet of Things (IoT) and wearable systems.
MCU shipments are also increasing. After declining seven percent in 2013, worldwide microcontroller shipments are forecast to increase 12 percent in 2014 and reach a new record-high of 18.1 billion units 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, according to the report. “A market correction and intense pricing competition in smartcard MCUs undercut total microcontroller unit and sales volumes in 2013,” said IC Insights.
Smartcard MCU sales fell 12 percent in 2013 but is forecast to grow 19 percent in 2014, according to the Mid-Year Update report. Overall, IC Insights analysts expect MCU sales to continue to strengthen in 2015 and 2016 with seven percent and nine percent increases, respectively, due to improvements in the global economy and new applications, including wearable systems and the IoT build-out.
Smartcard MCUs represent nearly half of all microcontrollers shipped worldwide but generate less than 20 percent of the total dollar sales volume due to their ultra-low average selling price, said IC Insights. Smartcard MCU shipments are expected to increase by 20 percent in 2014 to 8.7 billion units after a 23 percent drop in 2013. The remaining MCU units, used in a variety of embedded systems, are forecast to increase six percent to 9.4 billion devices in 2014 after rising 12 percent in 2013.
The report also forecasts worldwide MCU sales rising by a compound annual growth rate (CAGR) of 4.6 percent in the next five years, reaching nearly $19.1 billion in 2018. IC Insights projects the microcontroller market 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 one percent due to the next anticipated economic slowdown.
“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-bit and 16-bit devices,” said IC Insights. Analysts report that new 32-bit MCUs are priced “well under” $1 in high volumes, and below the cost of 8-bit microcontrollers. Total 32-bit MCU sales are expected to grow by a CAGR of 9.5 percent, reaching $11.0 billion in 2018, over the forecast period. Sales of 4/8-bit MCU sales are expected to fall by a CAGR of 1.3 percent to $3.7 billion in 2018 while 16-bit revenues will remain virtually flat, growing at an annual rate of 0.3 percent, holding at $4.2 billion in five years.