NEW YORK — A full-blown recovery in the microcontroller sector is underway as sales to industrial and automotive customers rebound amidst the upturn in the global economy. And it isn't confined to just the 32-bit market.
The 8-bit sector is also experiencing such tremendous growth that one supplier, Microchip Technology Inc., in Chandler, Ariz., has had to quickly step up efforts to ramp manufacturing. "Demand for our innovative new 8-bit microcontroller products introduced over the last three years have been so strong, it has outstripped our ability to ramp manufacturing fast enough," said Ganesh Moorthy, chief operating officer of Microchip, in its recent conference call with analysts.
The better-than-expected outcome was endemic across much of the MCU industry in the second calendar quarter, a trend that is likely to continue over the next couple of years. According to IC Insights' new Mid-Year Update to the 2014 McClean Report, microcontroller sales in 2014 are projected to grow 6%, to $16.1 billion — a record high — followed by increases of 7% and 9% in 2015 and 2016, respectively. Shipments are also expected to post healthy gains, climbing 12%, to 18.1 billion units this year.
The market research firm actually raised its forecast from 3%, partly due to a spike in smartcard MCU shipments, which account for nearly half of all MCUs shipped worldwide. After a market correction and intense pricing competition pushed sales down 12% last year, smartcard MCU sales are expected to grow 19% this year. In addition, shipments are projected to climb 20%, to 8.7 billion units, according to the report.
"The market outlook is positive and we are seeing an increase in demand creation activity," said Ritesh Tyagi, vice president of marketing for Renesas Electronics America Inc., one of the world's leading MCU suppliers, based in Santa Clara, Calif.
For Renesas, the 32-bit MCU sector is experiencing the most growth as the build-out for the Internet of Things applications takes off. He also cited strong demand for connected smart devices and the "exploding application or 'apps' economy."
"Customers are realizing that the CPU core is not that important; it is the peripheral mix that differentiates the controllers," Tyagi told EE Times. "Hardware engineers are not making decisions based on the bit size or the core. They are more often considering the integration and code reusability of any 8-, 16- or 32-bit platform in their decision-making process."
Still, the 32-bit iteration is the sweet spot of the market as suppliers aggressively push these advanced parts as price points come down low enough to be cost-competitive with both 8-and 16-bit devices, according to the report. Between 2013 and 2018, 32-bit MCU sales are forecast to grow by a compound annual growth rate of 9.5%, reaching $11 billion in 2018.
"The gap between 8-bit and 32-bit MCUs is decreasing significantly," Tyagi said. "It is more likely that a customer will find the tangible justifications to use a 32-bit MCU across the board."
However, Tyagi admits that there are plenty of applications in which designers prefer low cost and minimal software complexity, making an 8-bit MCU with a low pin count and memory a more attractive option.
"Unlike the declining 16-bit market, the 8-bit is still holding the fort because of its price and software simplicity," he said. Overall, customers are trying to standardize their software across a single platform to minimize the software development costs and to enable easy portability across low to high-end platforms, he added.