MCU-Microcontroller-Image

MCU Microcontrollers – Costs Climb

For nearly a decade, MCU prices have been declining at a steady pace. According to IC insights, the average cost for a microcontroller in 2006 was approximately $5.00. Yet as of last year, MCUs had fallen to roughly $1.09 per unit. So what’s changing — why are MCU prices on the rise now?

As stated by Punya Prakash, product-line manager for Texas Instruments SimpleLink MSP432 MCU, “[TI] has seen exponential growth in the 32-bit side of the business and continues to gain share with 16-bit microcontrollers… but the growth of 32-bit is much larger.”

In other words, because the demand for ‘thirty-bit’ MCUs has risen so rapidly, chip makers are struggling to keep up — which in turn affects the production of 8-bit and 16-bit microcontrollers, as well. But what does this mean for buyers?

According to IC Insights, “the average price for MCUs (including 4, 8, 16, and 32-bit devices) will increase 2% in 2017 after rising 8 per cent in 2016. Moreover, “the average MCU price will rise 3% in 2018, 4% in 2019, and 1% again in 2020.”

With so much shifting, the question persists, “how will the rise of MCU prices affect shipments?” Here’s what we know so far:


For nearly a decade, MCU prices have been declining at a steady pace. According to IC insights, the average cost for a microcontroller in 2006 was approximately $5.00. Yet as of last year, MCUs had fallen to roughly $1.09 per unit. So what’s changing — why are MCU prices on the rise now?

As stated by Punya Prakash, product-line manager for Texas Instruments SimpleLink MSP432 MCU, “[TI] has seen exponential growth in the 32-bit side of the business and continues to gain share with 16-bit microcontrollers… but the growth of 32-bit is much larger.”

In other words, because the demand for ‘thirty-bit’ MCUs has risen so rapidly, chip makers are struggling to keep up — which in turn affects the production of 8-bit and 16-bit microcontrollers, as well. But what does this mean for buyers?

According to IC Insights, “the average price for MCUs (including 4, 8, 16, and 32-bit devices) will increase 2% in 2017 after rising 8 per cent in 2016. Moreover, “the average MCU price will rise 3% in 2018, 4% in 2019, and 1% again in 2020.”

With so much shifting, the question persists, “how will the rise of MCU prices affect shipments?” Here’s what we know so far:


Microcontroller Shipments


The MCU market is becoming more demanding by the day. While escalating MCU unit shipments equate to “healthy revenue growth for the microcontroller market through 2021.” Researchers claim “Global MCU revenue will increase from $17.5 billion in 2016 to $18.8 billion in 2017 — a 7% increase. What’s more, “the MCU market is projected to grow through 2021 when revenue will total $25.1 billion.”

Pictured below:“Microcontroller unit shipments will post single-digit growth through 2021” Source: IC Insights

Microcontroller Shipments


The MCU market is becoming more demanding by the day. While escalating MCU unit shipments equate to “healthy revenue growth for the microcontroller market through 2021.” Researchers claim “Global MCU revenue will increase from $17.5 billion in 2016 to $18.8 billion in 2017 — a 7% increase. What’s more, “the MCU market is projected to grow through 2021 when revenue will total $25.1 billion.”

Pictured below: “Microcontroller unit shipments will post single-digit growth through 2021” Source: IC Insights

MCU Market Projections


It would be fair to assume that MCU projections are so high due to market consolidations — In recent years, NXP acquired Freescale and now QUALCOMM is purchasing NXP. Adding to the consolidations, Renesas bought Intersil, and Microchip acquired Atmel. Without question, the ranks of the microcontroller manufacturers have shifted.

However, consolidation is not the only factor at play here — the industrial segment, namely ‘factory automation,’ has created an IoT demand like never before.

With the automotive industry being forced into strict ADAS (advanced driver assistance systems) regulations, manufacturers that produce products that include safety cameras, automated braking, or blind-spot detection rely heavily on sophisticated microcontrollers.

MCU-Industrial-Automation-Image
Industrial automation — Microcontrollers in action


Looking at the graph below, it’s easy to see that factory automation will have a heavy hand in MCU growth (along with DRAM) for the next 5 years:

MCU Market Projections


It would be fair to assume that MCU projections are so high due to market consolidations — In recent years, NXP acquired Freescale and now QUALCOMM is purchasing NXP. Adding to the consolidations, Renesas bought Intersil, and Microchip acquired Atmel. Without question, the ranks of the microcontroller manufacturers have shifted.

However, consolidation is not the only factor at play here — the industrial segment, namely ‘factory automation,’ has created an IoT demand like never before. With the automotive industry being forced into strict ADAS (advanced driver assistance systems) regulations, manufacturers that produce products that include safety cameras, automated braking, or blind-spot detection rely heavily on sophisticated microcontrollers.

Looking at the graph below, it’s easy to see that factory automation will have a heavy hand in MCU growth (along with DRAM) for the next 5 years:

Microcontrollers ― By The Numbers:



  • Connector.

    2%

    MCUs are expected to rise 2% in 2017

  • Connector.

    43%

    This is the amount of all MCU unit shipments that fall under the “32-bit” device category.

  • Connector.

    $23.5 Billion

    In 2017, $23.5 billion dollars worth of MCUs are expected to ship.

  • Connector.

    $5.00

    This is was the avg. price for a 32-bit microcontroller in 2006.

  • Connector.

    $1.09

    Before prices began to climb, this was the avg. price for a 32-bit microcontroller in 2016.

  • Connector.

    $25.1 Billion

    By 2021, this is the forecasted size of the MCU global market.

Microcontrollers ― By The Numbers:


  • Connector.

    2%

    MCUs are expected to rise 2% in 2017

  • Connector.

    43%

    This is the amount of all MCU unit shipments that fall under the “32-bit” device category.

  • Connector.

    $23.5 Billion

    In 2017, $23.5 billion dollars worth of MCUs are expected to ship.

  • Connector.

    $5.00

    This is was the avg. price for a 32-bit microcontroller in 2006.

  • Connector.

    $1.09

    Before prices began to climb, this was the avg. price for a 32-bit microcontroller in 2016.

  • Connector.

    $25.1 Billion

    By 2021, this is the forecasted size of the MCU global market.

Curious about pricing?

Just let us know which MCUs you’d like info for, and we’ll have live pricing and stock levels delivered to your inbox.


MCU Blog Form
Microcontroller part number(s) you would like info for
PCNs, Live Pricing, Stock Levels, Datasheets, etc.
To see applicable price-breaks, please enter QTY
Sending

Curious about pricing?


Just let us know which MCUs you’d like info for, and we’ll have live pricing and stock levels delivered to your inbox.

MCU Blog Form
Microcontroller part number(s) you would like info for
PCNs, Live Pricing, Stock Levels, Datasheets, etc.
To see applicable price-breaks, please enter QTY
Sending

Leave a Reply

Your email address will not be published. Required fields are marked *