Commissioning of Smart Grid Projects to Create Demand for Microcontroller-Based Products

Tuesday 31 January 2012, Amsterdam

The report covers the latest information on the revenue and volume of the microcontrollers market. The report provides product - based, region -based and end-use based forecasts up to 2015. Microcontroller usage in smart grid sector is increasing, as they provide greater reliability in power generation. Various devices and equipment contain microcontrollers and the report discusses their role and also gives a detailed market revenue breakdown along with the key players and their market shares.

Commissioning of Smart Grid Projects to Create Demand for Microcontroller-Based Products

The global smart grid sector was a $35 billion industry in 2011, with revenues coming from different segments, such as Advanced Metering Infrastructure (AMI), IT and communication, grid security, advanced transmission, and energy storage. AMI mainly includes smart meters and other networking infrastructure required to connect the grid with the customers. Microcontrollers (MCUs) form the core of these smart meters which are used for various purposes, such as gas, water, and electricity monitoring. The cumulative global market for smart grids during 2011-2015 is expected to be around $180 billion, with the investments in the market expected to double to $70 billion by 2015. This growth in smart grid investments is a major revenue source for MCUs. These investments are expected to follow the commissioning of new projects, mergers and acquisitions, alliances, private equity investments and so on, across key countries in America, Europe and Asia Pacific.

Medical Equipment Market to Open New Revenue Streams

MCUs are already being used in the medical electronics industry in the construction of products such as blood pressure monitors, handheld ultrasound systems, spirometers, pulse oximeters, heart rate monitors, and glucometers. Ageing populations in the US and the UK are dependent on government healthcare programs creating a demand for affordable, high quality healthcare solutions. This has given rise to the development of miniaturized medical equipment, which in turn will result in increased MCU sales. Healthcare expenses have also come down for the government, as remote patient monitoring and health checkups are possible due to these product developments.

Growth in Smart Card Shipments to Drive Microcontroller Market

MCU-based smart card devices achieved shipments of around 5.9 billion units in 2011, which showed a 7% increase in shipments over 2010. The major drivers for this sector are the telecom, banking, retail, government ID, and healthcare segments. Contactless smart cards that use Near Field Communication (NFC) are expected to be the next prominent driver for the market, with contactless payments through mobile phones and keyless security being the main applications. The telecom sector accounts for around 75% of the overall shipments in 2011, and a continuing growth is expected in markets such as India, China, Indonesia and Brazil.

Decline in Prices to Affect Profitability

A general decline in prices of MCU units is expected to develop throughout the coming years. As the MCU market is a volume intensive business, this decline in prices can affect the profitability of companies producing MCUs. Out of the three MCU types, 32-bit MCUs are facing huge competition with more than 10 players in the market. This is reflected in the drop in the Average Selling Price (ASP) from $3.25 in 2010 to around $3.10 in 2011. The ASP is expected to reach $2.90 in 2012, and decrease further to around $2.70 in 2015. The graph below shows the ASP of 32-bit MCUs in 2008, and the expected ASP in 2015.

See figure: 32-bit Microcontroller Units, Average Selling Prices, $, 2008-2015
 

Microcontrollers to Incorporate Safety Features for Better Time to Market Capabilities

International standards, such as IEC 61508 and the newly launched ISO 26262 automotive standard, ensure that the design and manufacture of MCUs meet stringent functional safety requirements. This is essential, as MCUs are used in a variety of devices and fields which are prone to accidents and cause harm to human life. Any error on the design or manufacturing part of the MCU can cause serious complications to any industrial application. However, meeting such stringent standards is very difficult for engineers, as it involves in-depth end-to-end process analysis, component selections and design ratification. This checklist, coupled with critical development time conditions and cost constraints, can be challenging to the design engineers and the MCU industry alike. Nevertheless, these standards are to be incorporated when a product line is being developed initially. Once the safety checks and design system certifications are completed, the products have reduced software overheads, reliable system operations, and therefore have accelerated time to market capabilities.