Microcontroller market to stall in 2019

Microcontroller market to stall in 2019

Market news |
By Peter Clarke

Industry and geopolitical factors are serving to dampen down the market in 2019 but IHS Markit expects to growth as normal in 2020 with an increase in market size of 4.9 percent.

The global microcontroller (MCU) market grew in 2017 (13.6 percent) and 2018 (5.4 percent). However, a downturn in the wider electronics industry, rising geopolitical tensions and a sector-specific slowdown in automotive sales are conspiring to stall the market in 2019.

Annual microcontroller revenue forecast. Source: IHS Markit

MCU market revenue for 2019 is expected to rise 0.2 percent compared to 2018. “This represents a far better result than the larger semiconductor business, which is set to post its worst performance in a decade in 2019, with a 7.4 percent drop in sales,” said Christopher Morris, senior research analyst at IHS Markit, in a statement.

In previous years technologies such as artificial intelligence (AI) and automotive advanced driver assist systems (ADAS) triggered large amounts of activity in established companies and the creation of startups. However, the geopolitical situation has negatively impacted automotive chip demand. The result of this sales decline is a buildup of excess chip inventory, which must be worked off throughout 2019.

China is the biggest market for microcontrollers and a slowdown in the Chinese economy has hurt microcontroller sales and tariff and trade battles between the United States and China have added uncertainty to the market.

Similarly, with automotive accounting for 30 percent of the overall MCU market an automotive stall in 2018 is expected to continue into 2019 with a 3 percent decline in automotive MCU revenue in 2019.

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