>$7.4B in Microcontrollers to be Shipped by 2007

Microcontrollers continue to be a good business. With microcontroller designers adding new on-chip support for multimedia, communication protocols, data conversion (digital-to-analog and vice-versa) and bus standards, coupled with the expected rise of mask costs for nanometer technology, shifting technology standards, and the pre-existing barriers to the creation of complex proprietary ASICs, worldwide microcontroller units shipped are expected to increase at a compound annual growth rate of 8.74% between 2002 and 2007. The recovery of revenues, however, is forecasted to be on the weak side, as annual price erosion takes its toll.

Microcontrollers will continue to be in demand in the next five years as they are indispensable for many end-use applications and because their price and ease of use makes them faster time-to-market solutions than the more optimized, but also more risk-laden, custom designs. Moreover, some microcontroller vendors are offering a far more flexible deal to their customers: In return for a relatively small NRE charge, the microcontroller manufacturer will customize the chip to more closely match an application's needs, not just in memory size and contents, but also in employing the intellectual property and cores that make up the custom product. Atmel, for instance, quotes $300,000 for custom microcontrollers using cores from its IP library.

In-Stat/MDR has also found that:

• Microcontrollers that have added media processing and Internet protocol capability will have an edge on the others, and so will the new breed of chips that combine linear processing (data converters) with logic. High-performance microcontrollers will also see increased opportunity in the market.
• The top declining microcontroller application will be 4-bit analog wireless with a compound annual decline rate of almost 23% through 2007.
• The highest unit growth through 2007 comes in the 32-bit digital wireless, 32-bit DSL modem, and 32-bit monitor segments.
• Unit volume is dominated today by the 8-bit control and instrumentation segment, with >389 million units shipped this calendar year. This is followed by the 4-bit watch segment and the 8-bit PC peripherals segment.
• By 2007, the 16-bit hard drive and 8-bit infrared remote applications segments will be within the top 5 in terms of units shipped annually.

The report, "Affordable SOC: MCU Demand in Applications 2002-2007," covers the 2002-2007 status and forecast for microcontroller demand in more than 80 applications. For more information, visit http://www.instat.com/catalog/Scatalogue.asp?ID=19, or contact Rick Vogelei at 1-480-609-4533, rvogelei@reedbusiness.com. The report is priced at $3495.