Englewood, Colo. – Applications around the Internet of things (IoT), including connected cars, wearable electronics, and building automation, is fueling growth in the microcontroller (MCU) market. The MCU market for these and other IoT applications is forecast to grow at a compound annual growth rate (CAGR) of 11 percent, from $1.7 billion in 2014 to $2.8 billion in 2019, according to IHS Inc. In comparison, the CAGR for the total MCU market is four percent through 2019.
“What some still consider to be only hype surrounding emerging IoT trends has already begun disrupting the MCU market,” said Tom Hackenberg, senior analyst for IHS Technology, in a statement. “In fact, without the influence of IoT application growth, the MCU market is predicted to stagnate by the end of the decade.”
IHS Technology looks at the IoT as two segments - existing Internet-protocol- (IP-) addressable devices and Internet-connectable electronic devices. “This definition differs from the Internet of everything (IoE), whereby even unconnected electronics and unconnected objects are expected to be represented on the Web,” according to the Microcontroller Market Tracker.
IHS also divides the IoT market into three categories, which offer their own opportunities for hardware, software and services suppliers, according to IHS. The categories are as follows:
- Controllers such as PCs and smartphones
- Infrastructure such as routers and servers
- Nodes such as closed-circuit television (CCTV) cameras, traffic lights and appliances
“The IoT trend has a strong relationship with the MCU market, as the small nodes used for connectivity, and sensor hubs to collect and log data, are primarily based on MCU platforms,” Hackenberg stated. “Most serious suppliers of MCUs are already closely following the hype around the billions of connected devices; however, the industry’s challenge now is to quantify this new opportunity, since IoT is a conceptual trend, not a device, application or even a new feature.”
As a result, many semiconductor companies are developing IoT platforms, and/or have created IoT divisions to meet growing opportunities in this space, said IHS. Semiconductor suppliers cited in the report include Atmel Corporation, Broadcom, Cisco Systems, Freescale Semiconductor, Infineon Technologies, Intel, Microchip Technologies, NXP, Qualcomm, Renesas Electronics and Texas Instruments.
For example, Renesas recently developed a complete IoT platform that incorporates MCUs, software, and development/starter kits, addressing three development pain points: time to market, total cost of ownership, and barriers to entry.
But it’s not just semiconductor manufacturers that are working on advancing IoT technologies. Many electronics manufacturers are finding value in forming alliances, partnerships and joint ventures to better position themselves to tap into these new opportunities.
“IoT is a sweeping term that addresses broad opportunities for hardware, software and services across many different applications,” Hackenberg added. “Suppliers must therefore focus on their target markets and concentrate on the specific values they bring to these markets.”