We all know that the semiconductor industry is going through a down cycle. Many institutions have lowered their expectations for the semiconductor market next year. The World Semiconductor Trade Statistics Association released a forecast that the size of the semiconductor market in 2023 will change from a previously estimated year-on-year increase of 4.6% to a year-on-year decrease of 4.1% to US$556.5 billion. This will be the first decline in the semiconductor industry after 2019.
According to a report released by Gartner, semiconductor industry revenue will decline by 3.6% in 2023, from US$618 billion in 2022 to US$596 billion, lower than the earlier forecast of US$623 billion. The IC Insights report believes that global semiconductor demand will experience a cyclical decline in 2023, and total annual sales are expected to decrease by 5%.
In such a market, products such as storage, CPU, and GPU have all been affected, and MCU is also difficult to survive alone. The prices of some entry-level and mid-range MCUs have dropped to 2019 levels. According to sources, destocking has become a key issue for MCU suppliers and channel operators, and the abnormal inventory situation may continue until the second and third quarters of 2023.
This means that price competition for consumer MCUs will also continue to be fierce in 2023, as MCU suppliers may slash their offers to further consolidate their market share.
In order to resist the impact of continuous inventory adjustment of consumer MCUs, many MCU companies intend to focus more and more on developing mid-to-high-end 32-bit products.
Automotive Electronics Drive 32-Bit MCU Market
According to IC Insights statistics, among the global MCUs from 2011 to 2020, the market share of 32-bit MCU products has steadily increased, while the proportion of 4/8-bit MCU products has shown a downward trend. In 2020, 32-bit MCUs accounted for 62%, while 4/8-bit MCUs accounted for 15%. According to IC Insights, sales of 32-bit MCUs will grow at a compound annual growth rate of 9.4% in the next five years.
The application markets of MCU are mainly automotive electronics, industrial control, consumer electronics, and medical health, accounting for 35%, 24%, 18% and 14% respectively. The industry generally recognizes that the automotive industry will become an important driving force for the growth of MCU products. A traditional car needs about 70 MCUs, while a smart car needs at least 300 MCUs.
Nuvoton, an MCU company in Taiwan, has maintained a relatively high proportion of 32-bit MCU products, and most manufacturers are also expanding their product ranges for automotive and industrial control applications. Data show that the global MCU market for automotive applications will reach US$10 billion in 2026.
Automotive MCUs mainly include 8-bit, 16-bit, and 32-bit products; among them, 8-bit MCUs are mainly used in the control of low-end functions such as automotive fans, wipers, sunroofs, windows, and seats.
The operating frequency of 32-bit MCU is mostly between 100-350MHz, and its processing power and execution performance are better than 8/16-bit, and its application is wider. The 32-bit MCU is mainly used for high-end function control such as vehicle control, smart instrument, multimedia information system, power system, and assisted driving.
With the development of automobiles in the direction of electronics and intelligence, especially the body-on-board modules of electric vehicles, the demand for MCUs with wide power domains is increasing, which will drive the future demand for 32-bit MCUs in automobiles to increase significantly.
At present, automotive MCUs are mainly manufactured using 90nm nodes. With the increase in the intelligence of automobiles, automotive chips are upgrading their manufacturing processes. 40nm technology may replace 90nm as the mainstream process node within five years. The McKinsey report predicts that by 2023, the demand for automotive chips manufactured with 90nm and above processes will still account for 67%, but the compound annual growth rate of the supply of such chips in the next five years will only be 5%. Chips will be in tight supply for years. Insufficient production capacity of the 90nm process has prompted automotive chip manufacturers to migrate to the 65/55nm node, and some even directly advance to 40nm. It will take at least five years for a chip manufactured with a 40nm process to pass verification. After the verification is completed, the mainstream manufacturing process of automotive chips will migrate from 90nm to 40nm. Therefore, after the new 5-7 years, the process upgrade boom will also begin.
The increasing demand and the upgrading of new technology have brought new possibilities to the market, and the 32-bit MCU market is ushering in a revolution.
