Semiconductors and Components

Internet of Things Applications Boost MCU Growth

29 September 2015

Microcontroller units (MCUs) used in connected cars, wearable electronics, building automation and other Internet of Things (IoT) applications is expected to rise rapidly in the next five years and is having a positive impact on overall MCU market growth, according to a new report from IHS.

MCUs in IoT applications is set to grow faster than the overall MCU market through 2019. Source: IHSMCUs in IoT applications is set to grow faster than the overall MCU market through 2019. Source: IHSMCUs in IoT applications are set to grow at a compound annual growth rate (CAGR) of 11%, from $1.7 billion in 2014 up to $2.8 billion in 2019, IHS forecasts. Meanwhile, the overall MCU market is expected to grow at a CAGR of just 4% through 2019.

“What some still consider to be only hype surrounding emerging IoT trends has already begun disrupting the MCU market,” says Tom Hackenberg, senior analyst for MCUs & MPUs at IHS. “In fact, without the influence of IoT application growth, the MCU market is predicted to stagnate by the end of the decade.”

According to IHS, IoT comprises both existing Internet protocol (IP)-addressable devices and Internet-connectable electronic devices. This definition differs from the Internet of Everything (IoE), where even unconnected electronics and unconnected objects are expected to be represented on the Web. IHS defines the IoT market into three categories: controllers (PCs and smartphones), infrastructure (routers and servers) and nodes (CCTV cameras, traffic lights and appliances).

Hackenberg says that each of these categories offer new and interesting opportunities for suppliers of hardware, software and services. Most serious suppliers of MCUs are already closely following the hype around the billions of connected devices, “however, the industry’s challenge now is to quantify this new opportunity, since IoT is a conceptual trend, not a device, application or even a new feature,” Hackenberg says.

As IoT has risen as a hot trend and applications begin to emerge, many semiconductor companies have begun developing IoT platform solutions, while others have re-organized with an IoT division to address this real opportunity, IHS says. Companies that are adopting these strategies include Tom Hackenberg, senior analyst for MCUs and MPUs at IHS.Tom Hackenberg, senior analyst for MCUs and MPUs at IHS.Atmel, Broadcom, Cisco, Freescale, Infineon, Intel, Microchip, NXP, Qualcomm, Renesas and Texas Instruments.

Since IoT addresses so many markets and offers so many opportunities for hardware, software and services across many different applications, “suppliers must therefore focus on their target markets and concentrate on the specific values they bring to these markets,” Hackenberg says.

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Related links:

Microcontroller Market Tracker


News articles:

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Intel Expands Internet of Things Developer Program

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