Microcontroller Unit Shipments Surge but Falling Prices Sap Sales Growth
August 20, 2015 | IC InsightsEstimated reading time: 2 minutes
Explosion of smartcards, embedded sensors, and new Internet of Things applications are driving up unit volumes of low-cost 32-bit MCU solutions, says Mid-Year Update.
Microcontrollers are in the middle of an incredible wave of unit growth, but unprecedented price erosion is keeping a lid on the increase of revenues, according to IC Insights’ Mid-Year Update to its 2015 McClean Report on the integrated circuit industry. The mid-year forecast shows microcontroller shipments rising 33% in 2015 to 25.4 billion MCUs worldwide as a result of a tremendous upsurge in units for smartcards and 32-bit applications—many of which are aimed at the Internet of Things (IoT) market.
Despite the blistering pace of unit growth, dollar-volume sales of MCUs are now expected to rise by just 4% in 2015, reaching a new record high of $16.6 billion from about $15.9 billion in 2014, when total MCU revenues also increased 4%. As seen in Figure 1, average selling prices for microcontrollers are expected to continue plunging with ASPs nose-diving 21% in 2015 to $0.65 compared to $0.83 in 2014, when the ASP for MCUs fell 12%. IC Insights’ Mid-Year Update forecasts a 14% drop in MCU ASPs in 2016 with microcontroller revenue growing 7% to $17.7 billion and unit shipments climbing 25% to 31.6 billion worldwide.
Starting in 2014, microcontroller unit growth accelerated, driven by rocketing shipments of low-cost MCUs used in smartcards for protection in electronic banking and credit-card transactions, mass-transit fares, government IDs (such as electronic passports), medical records, and security applications. After a 26% increase in 2014, smartcard MCU shipments are now expected to surge by 41% in 2015 to 12.9 billion units worldwide, followed by 25% growth in 2016 to 16.1 billion.
The mid-year forecast significantly raises the projection for smartcard MCU shipments through 2019 as U.S. credit card companies, banks, retailers, government agencies, and other industry sectors begin to broadly adopt secure “chip-card” technology, much like Europe and other country markets have done since the 1990s. In the U.S., massive data breaches in credit card transactions at retail stores and growing concerns about identity theft have finally resulted a major move to smartcards for higher levels of security, anti-fraud encryption, and greater protection of lost or stolen debit and credit cards.
While price erosion weighs on total MCU sales growth, total microcontroller shipments are also accelerating because of strong demand for 32-bit designs and other single-chip solutions that can serve the explosion of sensors in wireless systems and connection to the Internet of Things. IoT-related MCU sales are forecast to grow 16% in 2015 to $405 million with unit shipments climbing 40% to 431 million.
Suggested Items
SEMI Applauds U.S. Chips Act Incentives for Intel Manufacturing Facilities to Bolster Semiconductor Supply
03/21/2024 | SEMISEMI, the industry association serving the global electronics design and manufacturing supply chain, applauded the United States Department of Commerce’s announcement of a Preliminary Memorandum of Terms for an award under the CHIPS and Science Act to support four new Intel Corporation semiconductor manufacturing sites in the states of Arizona, New Mexico, Ohio and Oregon.
Foxconn Announces FY2023 & 4Q23 Financial Results
03/18/2024 | FoxconnHon Hai Technology Group (Foxconn) announced its full year and fourth quarter 2023 financial results.
Hon Hai Announces FY2023 & 4Q23 Financial Results
03/15/2024 | FoxconnThe Group revised upward its full-year 2024 outlook from neutral to significant growth, particularly noting strong growth of AI servers and components will be the biggest highlight this year.
Global Top 10 Foundries Q4 Revenue Up 7.9%, Annual Total Hits US$111.54 Billion in 2023
03/14/2024 | TrendForceThe latest TrendForce report reveals a notable 7.9% jump in 4Q23 revenue for the world’s top ten semiconductor foundries, reaching $30.49 billion.
onsemi Aligns Business Groups to Expand Product Portfolio and Accelerate Growth
03/13/2024 | onsemionsemi announced the formation of the Analog and Mixed-Signal Group (AMG) which will be led by newly appointed group president, Sudhir Gopalswamy.