Unprecedented consolidation continues to redraw the semiconductor industry's vendor rankings, and nowhere is that more evident than the microcontroller segment.
Dutch chip vendor NXP Semiconductor NV became the world's leader in microcontroller sales in 2016 by virtue of its acquisition of rival Freescale Semiconductor Inc. That mantle could well belong to Qualcomm Inc. next year, assuming its $39 billion acquisition of NXP is finalized by the end of this year as planned.
Following the December 2015 close of its $12 billion Freescale acquisition, NXP saw its 2016 microcontroller sales total increase by 116 percent to $2.91 billion, good for about 19 percent of the total market, according to market research firm IC Insights Inc.
That Qualcomm—a fabless chip giant best known for its cellular chips that has never marketed a microcontroller—could claim the microcontroller lead next year illustrates the degree to which the semiconductor industry's unprecedented level of large-scale consolidation in recent years is reshaping the industry and vendor ranking lists.
The microcontroller segment in particular has undergone tremendous upheaval, with the ranks of the top three vendors being redrawn already several times in the past two years.
But Rob Lineback, senior market research analyst at IC Insights, told EE Times that should have little trouble adjusting to the microcontroller business. After all, Lineback noted, most of the microcontrollers in NXP's portfolio are based on the ARM architecture, just like Qualcomm's chips.
"It is a different type of business than application processors, but similarities in the architecture and development tools should help Qualcomm be successful in microcontrollers," Lineback said in an email exchange.
But with so many market dynamics in flux, Qualcomm's reign as top MCU vendor might well be short, Lineback added. "We'll see," he said. "The competition is fairly intense and other acquisitions are likely."
NXP's rise in the microcontroller rankings in 2016 edged Japan's Renesas Electronics Corp. from the top spot, a position it held for several years. Renesas, which as recently as 2011 sold one in three microcontrollers worldwide, has suffered a precipitous fall in sales in recent years due largely to the weak yen exchange rate, punctuated by a 19 percent decline in 2015. Renesas's microcontroller sales declined another 4 percent in 2016 to $2.5 billion, good for about 16 percent of the total microcontroller market, according to IC Insights.
—Dylan McGrath is the editor-in-chief of EE Times.