After drawing down MCU inventories in 2016, systems manufacturers stepped up purchases of MCUs in 2017 with unit shipments surging 22% and strong growth continuing in 2018. IC insights has raised its projection for MCU shipments to 18% in 2018 with the unit volume reaching nearly 30.6 billion. MCU revenues are now forecast to rise 11% in 2018 to an all-time high of $18.6bn, followed by 9% growth in 2019 to about $20.4bn (Figure 1).
The ASP for MCUs fell to the lowest point ever in 2017 and prices are continuing to drop at about the same rate in 2018, says IC Insights. However, the annual rate of decline has eased in the last five years compared to earlier this decade. The new forecast for MCU ASP shows the average selling price falling by a CAGR of -3.5% in the 2017-2022 period, much slower than the -5.8% decline seen during the 2012-2017 period.
A key factor in the 2017 recovery of MCU sales from the decline in 2016 was a turnaround in the smartcard MCU segment, IC Insights continues. About 40% of total MCU shipments are currently for smartcard applications, but that is down from about half early in this decade. Excluding smartcard MCUs, sales of “general” MCUs for embedded systems, automated control, sensing applications, and IoT-connected things are forecast to grow 11% in 2018 to $16.4bn after rising 14% in 2017. Shipments of general MCUs are projected to climb 25% in 2018 to 18.9bn units after rising 21% in 2017. General microcontrollers now represent a little over 60% of MCU unit shipments and are forecast to reach 68% of the total in 2022. Currently, general MCUs generate about 88% of total microcontroller revenues, and they are expected to reach 90% of the entire market value in 2022.
Across nearly all MCU applications, strong growth in 32-bit MCUs has reshaped the market, as suppliers aggressively promote more powerful designs that are cost competitive with 8-bit and 16-bit devices, which have typically been used in consumer products and other high-volume systems. In some cases, new 32-bit MCUs are being priced below the cost of 8-bit MUCs, IC Insights says. On average, 32-bit MCUs were selling for about twice the amount of the ASP for all MCUs in 2012. In 2018, IC Insights predicts the ASP for 32-bit MCUs to be just $0.09 higher than the ASP for all MCUs, and by 2022, the difference is forecast to shrink.