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China MCU Market Set for Recovery after Difficult 2012

20 June 2013

After shrinking in 2012, China's microcontroller (MCU) market is poised to recover this year as energy efficiency and device upgrades drive greater demand for the chips in embedded and automated applications, according to a China Research topical report information and analytics provider IHS. 

Revenue this year for the China MCU space is projected to reach $3.1 billion, up 7.7 percent from $2.9 billion in 2012. The market contracted 2.6 percent last year, but the 2013 expansion marks the start of at least a five-year cycle of continuing growth, with revenue expected to hit $4.5 billion by 2017.

The decline of the China MCU trade last year was a consequence of a still-fragile worldwide economy, coupled with a tight monetary policy implemented by Beijing. The Chinese government relented later and eased restrictions in the third quarter, and the country's export market for products including MCUs started to slowly recover.

This year, the China MCU market is gaining fresh momentum as sales take off once more in embedded applications and automatically controlled products and devices, including consumer and industrial appliances, automotive systems and the smart grid. Energy efficiency is also a driving factor, with a growing consciousness among Chinese consumers that environmentally friendly solutions are the way to go when they upgrade devices in home and personal use.

Dominant segments and their applications

China MCU use is strongest in the consumer segment with 25 percent share of total MCU revenue, forecast to reach $798 million this year. Here the main drivers are home appliances, televisions, video gaming and audio systems.

Close behind is the industrial segment with 24 percent market share or $750 million, spurred by MCU use in electronic devices for building home control, automation, medical applications, and energy generation and distribution.

The third-largest segment is automotive, also with approximately 24 percent share or $737 million. MCUs are used widely in automotive powertrains and safety-control systems to collect information in the vehicle and help manage assorted computerized tasks.

Key manufacturers and main MCU product categories

Among manufacturers, Renesas Electronics of Japan was the No. 1 MCU supplier to China last year with revenue of $405 million. The company has a full portfolio of MCU products for use in consumer electronics, automotive and industrial applications, and its offerings are both tailored and diversified to meet customer requirements.

Texas-based Freescale Semiconductor occupied the No. 2 spot with revenue of $234 million, followed by Microchip Technology of Arizona in third place with revenue of $210 million. Rounding out the Top 5 were French-Italian STMicroelectronics, ranked fourth with $157 million; and California-based Atmel, No. 5 with $120 million.

In terms of bit segments, 8-bit MCUs continued to dominate the China market last year with $1.2 billion in revenue, but 32-bit MCUs will be the fastest-growing sector, edging out the 8-bit market by 2016. Meanwhile, 16-bit MCUs will lose share over time to both 8-bit and 32-bit after revenue peaks this year and then starts on a slow decline.

Open cores like those exemplified by the ARM architecture are responsible for driving 32-bit MCU expansion, while 8-bit MCU growth is based on many applications in the automotive equipment as well as the building and home control segments. Competition offered by 32-bit MCUs is also a factor in the plunging fortunes of the 16-bit market, especially in the traditionally strong areas of automotive and consumer electronics where the 32-bit is now ascendant.

Read more >> China's MCU Market Declines but Rebound Expected

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