The microcontroller market is expected to grow at a CAGR of 6% during the forecast period. Increasing use of microcontrollers in automobiles, drivers.2, and drivers.3 are some of the significant factors fueling microcontroller market growth.
Increasing use of microcontrollers in automobiles
Global - Market size and forecast 2019-2024 ($ million) exclusive of COVID-19 effect
Year 2019 2020 2021 2022 2023 2024 Market size 19,175.06 20,319.47 21,655.38 23,165.61 24,902.89 26,905.09
The global microcontroller market will witness significant growth during the forecast period owing to various factors such as the growing implementation of automation across the industries, increasing employment of electronics in automobiles, and the growth of IoT devices. The developments in wired and wireless communication technologies and the implementation of a human-machine interface (HMI) technologies are driving the demand for semiconductor components integrated into automobiles, smart electronic devices, and industrial automation equipment.
Market participants across the globe, including automation equipment manufacturers, embedded computer manufacturers, and IT suppliers are focusing on forging alliances to provide cross-vendor integration and interoperability. For instance, market participants such as Robert Bosch, Cisco Systems, Intel, and National Instruments are working in collaboration with the Industrial Internet Consortium for the development of the IEEE 802.1 and IEEE 802.3 real-time Ethernet standards. The development of such standards will enable faster communication in real time between the master controller and field-mounted sensors and actuators without any latency.
The development of high-level networking technologies such as Ethernet will accelerate the implementation of automation solutions across the industries, thereby driving the growth of the embedded systems market incorporating powerful microcontrollers. For instance, in March 2018, Advantech entered into a strategic partnership with Nippon RAD to expand its business in IIoT and machine-to-intelligence (M2I) segments in Japan. This will provide Advantech an opportunity to understand the demand for IIoT products and services, explore different application areas in the region, and develop embedded solutions for IIoT and M2I segments.
IoT is a nascent technology and is expected to grow rapidly in the coming years. As a result, there has been an increase in the number of partnerships, which focus on developing IoT systems. For example, in April 2018, NXP Semiconductors announced a joint venture with JD.com, an e-commerce platform in China, for the development of IoT and AI solutions. Thus, a growing focus on IoT will also lead to increased demand for microcontrollers. IoT applications enable real-time sensing, monitoring, data sharing, and control of various connected devices. Hence, they are extensively used in embedded systems of the IoT devices. These microcontrollers are required to have integrated network connection capabilities and low power consumption.
Some of the developments in the market are mentioned below:
In February 2018, Texas Instruments announced the launch of SimpleLink wireless and wired microcontrollers. These are low power devices and operate on multiple connectivity platforms. These devices offer concurrent multi-standard and multi-band connectivity for Wi-Fi, Thread, Ethernet, Zigbee, Bluetooth 5, and Sub-1 GHz networks.
In December 2017, Renesas Electronics announced the development of microcontrollers with an on-chip flash memory having a fine circuit linewidth of 16 to 14 nanometer. They are developed with a focus on autonomous driving. They are expected to be available by 2023 for automotive and IoT applications.
In November 2017, Renesas Electronics announced the launch of new microcontrollers in its RX65N/RX651 Group microcontroller family for IIoT and connected devices in industrial automation, building automation, and smart metering systems.
In November 2017, NXP Semiconductors announced the launch of the LPC54000 Series of Flashless microcontroller Family. The microcontroller is suited for the connected device, consumer and industrial IoT applications. It offers 360 KB of SRAM, unlimited memory extensibility with a quad SPI Flash interface, along with network integration capability for Ethernet control, HS USB with the integrated physical transceiver, TFT LCD controller, and dual CAN FD controllers.
The increase in demand for automobiles and the integration of advanced technologies to enhance user safety and experience are other major factors for market growth. The number of microcontrollers in automobiles differs among the models, with low-end automobiles having 25-35 microcontrollers in them, while luxury cars have over 100 microcontrollers. The introduction of advanced features in automobiles will increase the requirement of microcontrollers in automobiles further. The microcontrollers are used for various functions in automobiles such as light detection and ranging (LIDAR), powertrain control, infotainment applications, and navigation systems. These facilities are being increasingly adopted in automobiles, leading to an increasing need for microcontrollers.
In addition, the increasing focus on conserving energy is driving the adoption of smart lighting controls and solutions and smart meters. Several governments and utility companies are taking initiatives to conserve energy by implementing smart metering solutions. The shipment of the installed base of smart meters is expected to reach more than 800 million units during the forecast period. Smart meters with advanced metering infrastructure architecture are providing two-way communication and are offering the benefits of better reliability and accuracy. These meters can also communicate directly with in-house display units and other meters to enable both the utilities and their customers to manage energy consumption in an improved manner.
The use of microcontrollers in smart grid projects is growing, as they offer better reliability in power generation. For instance, Kinetis KM3x_256 microcontroller three-phase meter reference design, offered by NXP Semiconductors, addresses the accuracy and cost needs. It provides a high-performance analog front-end integrated with an embedded programmable gain amplifier to improve the accuracy of energy measurement.
Thus, the adoption of microcontrollers is expected to increase during the forecast period. However, the global microcontroller market is expected to witness a slight decline in its growth during 2021-2022. This can be attributed to an increase in pricing competition among established vendors. However, the market is expected to register high growth in 2023, owing to the increased adoption of artificial intelligence (AI), IoT, and assisted autonomous driving.
The novel coronavirus disease (COVID-19) outbreak has led to disruptions in the routine operations of many industries globally. The lockdown enforced following the outbreak of the pandemic has led to supply chain disruptions and restrictions on product exports from APAC and worker shortage in manufacturing plants. Supplies have been further impacted by the disruption in logistics and transport movement, which has led to restricted access to and movement of products to and from ports in the first half of 2020. There are also chances of medium- and long-term negative impact on R&D and manufacturing activities, as well as a delay in projects/programs not related to the core supply chain/data management operations.
Furthermore, the outbreak of the COVID-19 pandemic has also resulted in a temporary lockdown around the world. The outbreak of the disease has impacted the global economy, owing to the temporary closure of manufacturing, production, and industrial facilities. APAC, and China, in particular, is the major hub for semiconductor industries. The pandemic has led to a temporary imbalance in the supply of raw materials that are needed for microcontrollers.
