IoT Microcontroller (MCU) Market

Market Overview

The global IoT MCU market size was valued at USD 4,696 million in 2021, and it is expected to reach USD 12,937 million by 2030, growing at a CAGR of 13% over the forecast period (2022–2030).

Internet-of-Things is the mechanism of connecting actuators, sensors, or any device to the Internet. It can lead to a substantial change in the way consumers interact with the devices such as home appliances, smart meters, security sensors, and HVAC systems. The IoT increases the connectedness of things and people on a vast scale. The high adoption of the Internet of things is due to the rising interconnectivity of machines and personal smart devices, growth in cloud computing & analytics, and the proliferation of applications connecting partners, supply chains, and customers. Due to the growing expansion of IoT, there is a rising concern over protecting the massive amount of data stored and transmitted by IoT devices.

Microcontroller units (MCUs) that support authentication algorithms, encryption, and decryption help mitigate data security concerns. MCUs support tamper detection, code protection, and advanced security capabilities protecting IoT devices from corrupting. MCUs for IoT applications consist of various hardware and software features such as autonomous peripherals that operate in low-energy modes, ultra-low-power modes with speedy wake time, and energy profiling & power estimation software tools.

Market Dynamics

Market Drivers

• Growing Demand for Wearable Devices

Wearables are intelligent devices that can be worn as accessories, implanted in the user's body, or embedded in the clothing. The miniaturization of sensors and the advances in the latest technologies, such as Artificial Intelligence, Machine Learning, and Big Data Analytics, allow wearables to be integrated with IoT technology.

Lifestyle, such as obesity, prompt individuals to pursue fitness-related activities and monitor their performance using wearables. Having realized that size, weight, power consumption, durability, ruggedness, reliability, and ease of use are some of the critical considerations end users are making while making a buying decision on wearable devices; wearables are evolving continuously in terms of ergonomics, product material, battery life, storage capacity, functionality, performance, and usability. The increasing preference for fitness wearables, particularly among millennials, is expected to drive the adoption of wearables.

Several companies, including Apple Inc. and Google LLC, are investing aggressively in developing wearable technology and introducing innovative wearables. As the technology advances, wearables will also evolve and offer numerous functionalities to further add to end-users comfort. In-store merchandising, the deployment of miniature sensors, ease of payment with the use of wearables, and the ability of smartwatches to communicate with end-users are some of the significant factors that are expected to drive the adoption of wearable devices.

• Strong Emphasis on High Operational Efficiency in Fleet Management

IoT can be used in various application areas related to fleet management, such as asset tracking, fleet route planning, and predictive fleet maintenance, to facilitate flexibility in operations and allow transportation and logistics companies to lower their capital expenditure (CAPEX) and operational expenditure (OPEX).

IoT in fleet management is an emerging technology to facilitate high operational efficiencies in transportation and logistics activities. The unabated growth of the transportation and logistics industries and the digitalization of vehicles are opening new opportunities for fleet management service providers. The growing need to cut costs while improving operational efficiencies and augmenting profitability has been the prominent driver encouraging the adoption of IoT in fleet management. 

IoT technology coupled with sensors, cameras, navigation systems, and mobile handheld devices can help monitor vehicular data in real-time. IoT in fleet management has enabled easy tracking and monitoring of vital vehicle parameters and driver performance. The growing adoption of IoT in fleet management bodes well for the growth of the IoT microcontroller market over the forecast period.

Market Restraints

• Increased Cost Involved in Research and Development

The discipline of IoT microcontrollers is undergoing research and innovation. Samsung recently conducted an extensive investigation in this domain for an "all-in-one bio-processor chip." However, the substantial research and innovation costs associated with IoT The main factors impeding the IoT microcontroller industry are microcontroller gadgets and intense competition. The Internet of Things (IoT) is flourishing, and as a result, a significant majority of enterprises are approaching the IoT microcontroller market. However, the industry faces significant challenges in profitability and client share. In addition, a considerable number of startups in the sector are projected to enter the market, creating competition.

Future Growth Opportunities 

• Growing MCU miniaturization

MCU miniaturization provides a platform for system designers that primarily include use-cases for new emerging applications. This growing web for IoT or connected devices encompasses smartphones, Smart Televisions (Smart TVs), tablets, home appliances, smart meters, and security systems, which is anticipated to positively impact the IoT MCU demand. 

Hence, the miniaturization of sensors and power sources and the continued rollout of reliable, seamless connectivity is opening new business opportunities in wearable technology.

Regional Analysis

The market based on region is divided into North America, Europe, Asia Pacific, Latin America, and the Middle East and Africa (MEA).

Asia-Pacific is expected to dominate the global IoT MCU market, primarily driven by China, India, and Southeast Asian countries. The market growth is attributed to an increase in the adoption of smart wearables, notably intelligent fitness trackers and intelligent wearables among millennials. Increasing investment in 5G networks is expected to boost the demand for IoT devices, thereby favoring the IoT MCUs market growth over the forecast period. 

The market in Asia-Pacific was valued at USD 2,267 million in 2021 and is expected to reach USD 6,695 million by 2030, growing at a CAGR of 14% over the forecast period. Asia-Pacific holds the largest market share of over 40% and is expected to reach a CAGR of 14% from 2021 to 2030. The market is primarily driven by China, India, Japan, and Southeast Asian countries. Increasing government initiatives to develop innovative and connected infrastructure bode well for the market growth. Additionally, a rising inclination for digital infrastructure, growing urbanization, and rapid deployment of public Wi-Fi hotspots drive the market growth over the forecast.

The Europe region was valued at USD 1,036 million in 2021 and is expected to reach USD 2,826 million by 2030, growing at a CAGR of 13% over the forecast period. The rapid adoption of smart meters in Europe is expected to drive the IoT MCU market growth over the forecast period. Increasing government investments in grid modernization and digitalization by utility companies are expected to drive the demand for smart meters in Europe. Countries in Western and Northern Europe are expected to replace traditional meters with smart meters in the next eight years.

Segmental Analysis

The IoT MCU market is segmented on product, application, and region.

In terms of Product

the Global MCU market is divided into 8 bit, 16 bit, and 32 bit. The 32-bit segment was valued at USD 2,186 million in 2021 and is expected to reach USD 6,522 million by 2030, growing with a CAGR of 14% over the forecast period. The 32-bit is the most compatible MCU for IoT applications. It processes multiple peripherals efficiently and is extensively used in industrial applications such as factory automation, grid infrastructure, and building automation applications. However, the 8-bit segment is extensively used for low-power applications such as smart wearables and connected devices. An 8-bit Microcontroller Unit (MCU) comprises a low gate count, software simplicity, and lesser complexity, making the 8-bit MCU cheaper than the other microcontrollers. In terms of revenue, the 8-bit segment is expected to register a CAGR of 13% over the forecast period.

In terms of Application

The global MCU market is divided into industrial automation, smart home, consumer electronics, and others. The industrial automation segment was valued at USD 1,550 million in 2021 and is expected to reach USD 4,390 million by 2030, growing with a CAGR of 13% over the forecast period. It is ascribed to technological advancements in Industry 4.0 that led to the rapid shift of industries toward intelligent manufacturing. The surge in adoption of digitization in various attributes of the entire supply chain of manufacturing companies, demand for data analytics, the need for predictive maintenance, and advancement in the industrial networking infrastructure have further increased the demand for IoT MCUs in the industrial automation segment.

Consumer electronics, including smartphones, tablets, and smart wearables, have gained popularity. The demand for smart devices is further accelerated by energy-efficient touchscreen devices, accelerometers, proximity sensors, and camera modules. The scope for sensor adoption is experiencing high growth due to the increase in several consumers mentioned above in IoT applications. COVID-19 has further boosted the demand for smart wearables, a trend that is expected to continue over the next two to three years. Furthermore, advancements in sensor technology, telecommunication data analysis, and microelectronics have been attributed to the enormous increase in wearable technology. Increasing consciousness for health and fitness among individuals significantly contributes to the adoption of wearable technology, supporting market growth. The adoption of smartwatches and fitness trackers in consumer electronics is witnessing significant demand and is predicted to grow at a CAGR of 12% over the forecast period.

Recent Developments

• In February 2020, Broadcom Inc. announced BCM4389, the first Wi-Fi 6E client device. The BCM4389 is a smartphone combo chip that offers over 2 Gbps of speeds and enhanced battery backup for smartphones and future Augmented Reality (AR) and Virtual Reality (VR) devices.
• In November 2021, Espressif Systems (Shanghai) Co., Ltd introduced Smart Switch based on the ESP32 C3 SoC. The ESP32 C3 SoC is a highly reliable, cost-effective product that consumes less power than transforming conventional switches into intelligent switches.
• In October 2021, Holtek Semiconductor Inc launched HT32F67741 MCU. It features Bluetooth 5.2 Arm® Cortex®-M0+ BLE microcontroller used for a wide range of applications, including home appliances, health care products, intelligent toys, beacons, data loggers, and Human Interface Devices (HID) service.
• In November 2021, Infineon Technologies AG enhanced its existing PSoC™ 6 microcontroller family by introducing Embedded Wizard's graphics library and studio tool. The tools enable designers to develop new graphic interfaces and deploy them to their existing PSoC 6 MCUs.
• In June 2021, Microchip Technology Inc released the MPLAB cloud tools ecosystem for PIC and AVR devices. The cloud platform integrates configuration and collaboration tools with knowledge-based search to improve the embedded development workflow.
• In April 2021, Nuvoton Technology Corporation launched NuMicro® M0A23/M0A21 series MCU. The MCU is suitable for automotive and industrial applications. The MCU offers analog and digital peripherals in SSOP20 TSSOP28 packages and is ideal for small form factor applications such as automotive lighting, battery management system, automotive body control, power applications, and automotive ultrasonic radar control.
• In July 2020, Synaptics Incorporated acquired the wireless IoT business of Broadcom. The acquisition enables the former company to strengthen its market presence in consumer IoT application areas. It also allows Broadcom to focus its core competencies in the semiconductor solution and infrastructure software segments.
• In September 2021, NXP Semiconductor collaborated with MicroEJ, a company specializing in software enablement solutions for IoT and embedded devices, to provide the MICROEJ VEE on-device platform. The partnership enables the latter company to offer an integrated solution to enhance the former company's performance of i—MX RT500 Crossover MCUs for low-power applications such as wearables.