Wearables and the IoT boost MCU sales

14th August 2014

IC Insights

Nat Bowers

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Since losing momentum in the last three years due to economic uncertainty, the microcontrollers market appears to be on the verge of another substantial growth cycle. With the global economy expecting modest growth in the next few years, MCU sales are predicted to increase 6% in 2014 to a record high of $16.1bn, according to IC Insights’ Mid-Year Update to the 2014 McClean Report.

Due to steady improvements in overall MCU demand and a strong recovery in the smartcard market segment, set to grow 19% this year, overall MCU sales are expected to increase 7% and 9% in 2015 and 2016 , respectively. This is in part due to improvements in the global economy and the emergence of new applications, such as wearable systems and the build-out of the IoT.

The report update predicts worldwide MCU sales to increase by a CAGR of 4.6%, reaching $19.1bn in 2018. Unit sales are expected to reach record highs each year in the forecast period (See Figure 1, below).

Wearables and the IoT boost MCU sales

Figure 1

With an ultra-low average selling price, smartcard MCUs represent nearly half of all microcontrollers shipped worldwide but generate less than 20% of the total dollar sales - but shipments are expected to rise 20% in 2014 to 8.7bn units. Other MCU sales are forecast to increase 6% to 9.4bn units in 2014.

A change in the market is occurring as 32-bit microcontroller shipments increase since their cost can be under $1 in high volumes - below the cost of 8-bit MCUs. In the forecast period to 2018, total 32-bit MCU sales are expected to grow by a CAGR of 9.5%, to reach $11.0bn. The Mid-Year Update shows 4/8-bit MCU sales falling by a CAGR of 1.3% to $3.7bn in 2018 while 16-bit revenues will barely grow at an annual rate of 0.3%, remaining at $4.2bn in five years.