Instead of expected annual price drops in the high single digits, buyers should prepare for stable and even slight price hikes for microcontrollers over the next few years. After reaching a record-low average selling price (ASP) in 2015, microcontroller pricing is forecast to stabilize and increase slightly over the next four years, according to new research from IC Insights.
Microcontroller (MCU) ASPs are expected to rise by a compound annual growth (CAGR) rate of 1.6 percent over the forecast period of 2015 to 2020, compared to an annual decrease of 7.7 percent between 2010 and 2015.
Price erosion, particularly for 32-bit microcontrollers, has impacted sales growth in three of the last four years. However, in 2015, MCU sales increased by less than a half percent reaching slightly more than $15.9 billion due to a 15 percent increase in MCU shipments, according to IC Insights. Unit volume shipments reached 22.1 billion globally in 2015.
“Strong unit growth—driven by smartcard MCUs and 32-bit designs—enabled the MCU market to overcome a 13 percent drop in the ASP of microcontrollers to a record-low $0.72 in 2015,” said IC Insights.
The MCU market is expected to reach record-high revenues over the next four years despite an overall slowdown in unit growth. Unit shipments are forecast to grow at a CAGR of 3.9 percent during the forecast period.
IC Insights attributes the slowdown of unit growth to a maturing smartcard MCU market, which has accounted for nearly 50 percent of MCU shipments and 15 to 16 percent of total revenues. Another contributor is “tighter reins on IC inventories for the ‘next big thing’ —the Internet of Things (IoT).” Smartcard MCUs will account for 38 percent of total microcontroller unit shipments and about 12 percent of sales by 2020.
MCU sales are forecast to reach nearly $16.6 billion in 2016, which is a four percent increase from $15.9 billion in 2015, while unit volumes will grow by two percent in 2016, reaching 22.4 billion units. The ASP for total microcontrollers is expected to increase by two percent this year to $0.74.
Over the forecast period, MCU sales are forecast to grow by a CAGR of 5.5 percent to nearly $20.9 billion in 2020. Since the mid-1990s, worldwide MCU sales have grown by a CAGR of 2.9 percent, according to IC Insights.