8-bit: still very viable
For Microchip Technology, the 8-bit market has been a boon. The company has been committed to the sector, recently launching an entire new family of products based on a new high-efficiency 8-bit core that can use the C programming language like 16-bit and 32-bit MCUs, according to Steve Sanghi, president and chief executive of Microchip, during its recent earnings call with analysts. The company also introduced a category of core-independent peripherals that allows its customer to run the peripheral functions without the microcontroller core engine running or consuming the CPU's power.
"These have allowed our customers to expand the use of 8-bit microcontrollers dramatically and the demand for many of these products have really exploded," he said.
Microchip's latest MCU products are built using advanced, proprietary technology out of its Gresham, Ore., fabrication facility. Wafer demand is growing at a rate of 15% and 20% per quarter, resulting in capacity constraints across the board. Microchip increased its capital expenditures to $175 million from $125 million, the highest level in more than 10 years, to fund its capacity expansion plans.
In a letter to customers dated July 31, Sanghi wrote: "Many of our product lead times are currently between six weeks and 18 weeks. We are ramping all of our factories as quickly as we can, yet are limited by our suppliers' lead times."
Impervious to market pressure, Microchip also stuck with the PIC architecture, despite skepticism that ARM would eventually dominate. Sanghi also said that efforts to try to insert the M0 Cortex 32-bit ARM core into the 8-bit microcontroller socket has tapered off.
"These products had a 32-bit engine but otherwise no peripherals or features. They were largely bait-and-switch kinds of products and customer have seen the hollow offering," Sanghi told analysts.
Atmel Corp. in San Jose, Calif., has also seen lead times for both 8- and 32-bit devices stretch a bit over the few quarters, but not to the point in which customers are building large inventories to protect against shortages, according to Patrick Sullivan, vice president of marketing with Atmel's MCU business unit. "We see a pretty balanced supply and demand picture at this time," he told EE Times.
The company's fab utilization rate is up "but that is by design with our fab light strategy," a manufacturing model it switched to more than eight years ago that allows it to run its fab at a high utilization rate and take advantage of the capacity at its foundry partners as needed. "This strategy is giving us more flexibility with our supply chain," he said.
Atmel's Colorado fab is currently running at a utilization rate of over 90% to meet 8-bit MCU demand, which has also exceeded the company's expectations. Sullivan suggests that those who disagree to reconsider its potential. "There are several markets and applications that are ideal for using an 8-bit device that are cost- and code-efficient."
— Ismini Scouras writes about the semiconductor industry for EE Times.