The humble microcontroller (MCU) is roaring back into the limelight in the post-Covid world while continuing to be pervasive in embedded control and computing functions. Its growth is now mainly driven by embedded automation and the spread of sensors. Here, automotive is the elephant in the room, with MCU consumption in vehicle designs spanning from infotainment systems to power windows and powertrain to engine controls.
In 2019, MCUs fell 7% due to a weak global economy, and then dropped 2% in 2020 because of the outbreak of the Covid-19 virus pandemic. However, the worst of the coronavirus-driven downturn was over in the summer of 2020. That’s when automotive and other end-use markets began to stabilize, and MCU suppliers started to lag behind the rebound-driven upturn.
However, according to IC Insights’ mid-year update to The McClean Report 2021, MCU suppliers began to ramp up production in the second half of 2021. For instance, in July 2021, TSMC announced it has increased its third-quarter wafer fab capacity for automotive MCUs by 60%, which was 30% higher than pre-pandemic levels.
Figure 1 The top five microcontroller suppliers accounted for 82.1% of MCU sales in 2021.
Now IC Insights’ second-quarter update of its 2022 McClean Report reveals more details of MCU’s staggering growth cycle in the post-coronavirus times. For example, the 2021 surge was the highest percentage growth in the MCU market since 2000. Moreover, the average selling price (ASP) for MCUs climbed 12% in 2021, the highest annual increase since the mid-1990s.
It’s worth noting here that ASPs for 32-bit MCUs have been the highest, and more than three-fourths of automotive MCU sales come from 32-bit microcontrollers. Another notable trend: all five top MCU suppliers—NXP, Microchip, Renesas, ST, and Infineon—develop and sell ARM-based MCUs. Finally, MCU suppliers that made MCU-centric acquisitions have fared much better.
In retrospect, mergers and acquisitions have paid handsomely in the MCU space. Take the case of Renesas, which had the top spot in MCU rankings back in the first half of the 2010s. Then, while Renesas was busy acquiring analog companies like Intersil, NXP bought another major MCU supplier, Freescale. And that’s how NXP pushed Renesas to the runner-up position in the MCU world.
Fast forward to 2022, even the runner-up position has been taken over by Microchip, a company known for making acquisitions, including the purchase of MCU powerhouse Atmel in 2016. Infineon marks another acquisition success story with its Cypress Semiconductor deal. The acquisition made in 2020 helped Infineon expand into automotive MCUs and other embedded systems applications and capture the fifth spot in MCU rankings.
Figure 2 The 32-bit microcontrollers rose by 13% in 2021.
The above data from IC Insights demonstrates that the microcontroller segment is alive and well and shows no signs of stagnation. At the height of chip shortages and production constraints in 2021, its shipments grew by 13% to 31.2 billion units. The data also shows that scale is becoming crucial, and the segment is falling into the hands of large MCU makers.
In 2021, MCU suppliers outside the top-10 list had just 6.5% of the market share.
Majeed Ahmad, editor-in-chief of EDN and Planet Analog, has covered the electronics design industry for more than two decades.