ARM's MCU architecture to dominate IoT market, says Semicast

Semicast broadly defines the IoT to include all applications except PCs, phones and tablets, thus encompassing the automotive, digital home, industrial and medical sectors. ARM, well-known as the architecture for apps processors in smartphones and tablets, also enjoys lesser-known success in markets as diverse as automotive entertainment systems, digital cameras, HDDs, MP3 players, printers, set-top boxes and TVs.

In 2009, ARM’s IoT unit shipments were made up almost exclusively of SoCs, with MCUs accounting for only around 5% of the total. In 2014, Semicast estimates an even split of shipments of ARM-based SoCs and MCUs in IoT applications, at about 3bn units each. For 2018, Semicast forecasts that the MCU will move firmly into the lead.

ARM-based MCUs, available since the mid-1990s from companies such as Atmel, Cirrus and Oki, were based on the standard ARM7 architecture and had little success. ARM was then perceived as the preferred architecture for cellphones, with limited suitability for the MCU market. Companies such as Motorola (now Freescale), Hitachi, Mitsubishi and NEC (together now Renesas) ruled the 32-bit MCU market, with proprietary architectures such as 68K/Coldfire, SuperH and V850.

Perceptions began to change in 2006, with ARM's announcement of the Cortex-M processor family, with Luminary Micro. Luminary’s vision was to blur the traditional '8/16/32-bit' boundaries and challenge the perception that ARM could not succeed in cost-sensitive MCU applications. Today the leading suppliers of ARM-based MCUs include Atmel, Freescale, NXP, STMicroelectronics, TI and Toshiba. Freescale now focusses its MCU efforts squarely on ARM.

ARM has broadened the Cortex-M family to cover performance all the way from the M0 to the M7 cores, taking its microcontroller portfolio into territory ranging from 8-bit MCUs to low-end microprocessors. ARM MCU suppliers have driven the architecture into lower performance and ever more cost-sensitive applications, many of which were historically associated with 8- and 16-bit devices. Today, M0-based MCUs are available for less than $0.30, and Semicast’s research suggests the ASP of ARM MCUs has fallen from around $7 in 2006, to under $1 in 2014, equating to an average annual price decline of 20% over this period. Such aggressive depreciation is a result of a change to the product mix, as M0 and M0+ devices drive the ASP lower, but the recently introduced M7 core at the high end, as well as Cortex-R4 and R5 based devices support the ASP in the medium-term.

Alongside the adoption of ARM-based MCUs in IoT, there has also been a parallel trend towards ARM-based MPUs, with the introduction of products based on the Cortex-A family of cores. Unit shipments of ARM MPUs are currently small in comparison with MCUs, but are now accelerating as both the number of suppliers and product families increases. Atmel, Freescale, Renesas and TI have all developed families of MPUs based on the A5, A8 or A9 cores, typically for graphically intensive applications such as digital signage in the industrial market, HMIs in medical electronics, or navigation systems and hybrid instrument clusters in automotive. ARM MPUs based on the Cortex-A cores tend to be priced in the range of $5-10, whilst Cortex-M MCUs tend to be priced up to around $5. At the top end of the MPU market, suppliers such as AMD and Freescale are using the 64-bit A53 and A57 cores to produce high performance MPUs for networking infrastructure, although such devices will make only a small contribution to unit shipments, owing to their specialised nature.

As ARM casts its net ever wider, one might ask; “What about Intel?” ARM’s share price often fluctuates wildly as stockmarket analysts digest Intel's latest announcements for smartphone and tablet hardware, and the threat that poses to ARM. However ARM’s business is already diverse and well-established in the world of invisible tech that makes up IoT.

Colin Barnden, Principal Analyst, Semicast Research, commented: “Intel’s move beyond the PC to the mainstream embedded market can be traced back to 2008, with the release of the Atom family. Intel then launched a full scale assault on the IoT market towards the end of 2013 with the introduction of Quark.” However a look at pricing for both the Atom and Quark families shows Intel has a long way to go to compete head-to-head with the ARM architecture in IoT. Based on Intel’s recommended customer prices, Atom goes down to about $20, with Quark down to around $10.

Thus measured on price alone, in IoT applications Intel is competing with Quark mostly against ARM Cortex-A8/A9/A15 MPUs, but leaving Atom and the remainder of the IA portfolio at a different price point altogether. Considering that Intel bought Basis Science earlier this year for about $150m, Intel seems interested in developing processors for wearables, but it seemingly has little to compete with ARM Cortex-M MCUs, particularly in the highly competitive, high volume world of sub-$1 catalogue MCUs for IoT. Thus if Intel is serious about competing in IoT at all performance points, it will surely have to re-enter the MCU market soon.

Barnden summed up “From 2006 to 2018, Semicast’s research estimates shipments of ARM-based MCUs in IoT totaling about 30bn units. For the time being at least, ARM looks set to be the clear architectural winner in the battle of volumes in IoT, courtesy of the humble MCU.”