SAN FRANCISCO — The market for microcontrollers is forecast to rise steadily over the next five years, due mostly to the the increasing prevalence of sensors and the rise of the Internet of Things (IoT), according to market research firm IC Insights.

MCU shipments are projected to rise by 18% this this year, reaching 30.6 billion units, IC Insights said. The firm forecasts that MCU sales will increase 11% to reach a new all-time high of $18.6 billion this year, with further growth of 9% to $20.4 billion expected in 2019.

Over the next five years, IC Insights predicts that MCU sales will increase by a compound annual growth rate (CAGR) of 7.2%, reaching nearly $23.9 billion in 2022. Unit shipments are forecast to increase by an 11.1% CAGR over the same period, reaching roughly 43.8 billion units in 2022.

MCU market history and forecast

MCU sales rebounded last year after sales decreased by 6% to $15 billion in 2016. Unit shipments surged by 22% to 25.8 billion units, with sales rising to $16.8 billion, according to IC Insights.

The average selling price (ASP) for MCUs sanks to its lowest point ever in 2017, and prices continue to to decline at roughly the same rate this year, IC Insights said. However, the annual rate of decline over the past five years eased compared with earlier this decade, according to the firm.

IC Insights' revised MCU forecast for the year projects that MCU prices will decline by a 3.5% CAGR from 2017 through 2022. By contrast, the ASP declined by a 5.8% CAGR between 2012 and 2017 and by 6.3% between 1997 and 2017, the firm said.

— Dylan McGrath is the editor-in-chief of EE Times.