Market Trends of Global Microcontroller (MCU) Industry
Automotive to Hold Significant Market Share
- The automotive microcontroller market is poised for significant expansion during the forecast period. Microcontrollers, compact electronic components, are pivotal in managing and regulating various systems within automobiles. These low-power integrated circuits are tailored for embedded systems' real-time data processing and control. Applications of microcontrollers in the automotive sector span advanced driver assistance systems (ADAS) and anti-lock braking systems (ABS) to airbag control, entertainment systems, and gearbox control.
- Advancements in automation and strict adherence to safety regulations are propelling the growth of the microcontroller market. Microcontrollers enhance a vehicle's performance, safety, and convenience by processing sensor data, facilitating communication between electronic systems, and managing actuators. Original equipment manufacturers (OEMs) typically embed around 25 to 35 electronic control units (ECUs) in standard vehicles. These ECUs, powered by microcontrollers, oversee functions like the powertrain, suspension, brakes, and more.
- In recent years, the automotive industry's growing reliance on electronic components has led to a surge in demand for automotive microcontrollers. The rise of electric vehicles (EVs), connected cars, and autonomous driving technologies has been instrumental in this market's expansion. Furthermore, escalating consumer demands for enhanced safety, comfort, and entertainment have intensified the need for advanced microcontroller solutions.
- Globally, the demand for microcontrollers is set to rise, driven by the surge in new energy/electric vehicles (NEVs) and advancements in autonomous driving. The International Energy Agency (IEA) projects that electric car sales in the Net Zero Scenario could constitute about 65% of total car sales by 2030. To meet this target, electric car sales must grow at an average rate of 25% annually from 2023 to 2030, leading to an anticipated global electric car stock of nearly 350 million vehicles by 2030.
- Countries including China, Japan, India, the United States, and several EU states are heavily investing in boosting electric vehicle (EV) production. Such initiatives are likely to escalate the demand for Motor Control Units (MCUs) in the automotive industry. The advent of connected cars and EVs has empowered microcontrollers to bolster communication between various vehicle components, enabling features like vehicle-to-vehicle (V2V) communication and over-the-air (OTA) updates.
- Numerous companies are actively investing in product innovations in response to the surging demand for microcontrollers in the automotive realm. In May 2024, Infineon Technologies launched the PSoC 4 High Voltage Precision Analog (HVPA)-144K microcontroller, tailored for the automotive battery management sector. This state-of-the-art microcontroller integrates high-precision analog and high-voltage subsystems on a single chip and meets ISO26262 standards, ensuring efficient and secure battery management in modern vehicles.
- Additionally, in April 2024, Infineon Technologies AG announced its robust growth trajectory in the automotive semiconductors market for 2023. The company's success is largely attributed to its AURIX and TRAVEO microcontroller families. These families are steering the automotive industry toward a future of autonomy, connectivity, and electrification, boasting enhanced power, performance, and cutting-edge features like AI-based modeling and cybersecurity.
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Asia-Pacific to Experience Significant Market Growth
- Asia-Pacific has solidified its status as a pivotal hub for semiconductor manufacturing and the production of semiconductor-based devices. Home to leading electronics and automotive firms, the region plays a vital role across diverse industries, including automotive, industrial automation, pharmaceuticals, consumer electronics, and robotics.
- Growing investments in the consumer electronics sector, particularly in countries like India and China, are set to propel market growth. GSMA forecasts India will rank as the world's second-largest smartphone market by 2025, with a projected 1 billion devices in use. By 2025, India is also expected to have 920 million unique mobile subscribers, 88 million of whom will be on 5G. Ericsson notes that the share of smartphone subscriptions in India will rise from 82% in 2023 to 93% by 2029, with total mobile subscriptions in the region hitting 1.27 billion by 2029.
- Furthermore, surging EV sales and investments in the EV sector across APAC nations are anticipated to fuel market growth. For example, China stands out as a global leader in EV production and consumption. Huawei forecasts that by 2030, autonomous vehicles will account for over 10% of global new vehicle sales. China's EV penetration is set to rise by 25% by the end of the forecast period. This growth is expected to boost demand for semiconductors in advanced driver-assistance systems (ADAS) and, consequently, for microcontrollers (MCUs) across various countries.
- India is on the brink of significant market growth, spurred by surging demand for electric vehicles (EVs) and proactive government initiatives. The nation aims for ambitious EV sales targets by 2030: 30% for private cars, 70% for commercial vehicles, 40% for buses, and a striking 80% for two- and three-wheelers. This ambition translates to a goal of 80 million EVs on Indian roads by 2030. Further underscoring its commitment, India strives for 100% local EV production under the 'Make in India' initiative. The Ministry of Road Transport and Highways proudly announced surpassing 1 million EV sales in under nine months in 2023, a feat that took the entirety of 2022.
- Data from the Federation of Automobile Dealers' Association (FADA) highlights a robust 49.25% Y-o-Y surge in India's electric vehicle sales, totaling 1,529,947 units in 2023, up from 1,025,063 units the previous year. E-commercial vehicles saw a remarkable 114.16% increase, with sales jumping from 2,649 units in 2022 to 5,673 in 2023. Electric passenger vehicles also showcased impressive growth, reaching 82,105 units in 2023, a 114.71% rise from the 38,240 units sold in 2022. Such surging EV demand and sales in the region are poised to bolster the market for MCUs.
- Asia-Pacific has long been a cornerstone of global economic growth, thanks to its diverse industrial supply chains. With major industrial hubs in countries like India, China, and Japan, the region is a dominant player on the world stage. Regional governments are actively enhancing industrial manufacturing capabilities by integrating advanced technologies. As investments surge in sectors like healthcare and communications, the market is poised for further expansion.
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