Under the spotlight of the semiconductor industry, the MCU market has always been a battleground.
Once, Texas Instruments (TI) and STMicroelectronics (ST) held a dominant position in the industry due to their first-mover advantage and technological accumulation, influencing the entire industry’s dynamics. However, amidst the changing market tides, these two giants have recently encountered difficulties.
At the same time, domestic MCU manufacturers are rapidly rising with technological breakthroughs and cost advantages, marking the beginning of an intense industry competition.
01The Giants’ Predicament: TI and ST’s Crisis Moment
In March of this year, a layoff announcement put TI at the center of industry scrutiny.
TI conducted a round of layoffs at its Lehi factory to support its long-term operational plans.
According to TI’s official website, it has a total of 15 manufacturing plants worldwide, including wafer fabrication, packaging and testing, and bump processing testing plants. By 2030, TI’s internal manufacturing ratio is expected to reach 90%.
Currently, TI has 8 12-inch wafer fabs, of which 2 are located in Lehi, Utah, USA, namely LFAB1 and LFAB2 (“L” represents Lehi).
LFAB1 has already been put into production, while LFAB2 is still under construction. It can be inferred that the recent layoffs likely occurred at the LFAB1 plant.
LFAB1 produces analog and embedded semiconductors, and was acquired from Micron Technology’s 12-inch wafer fab in 2021, starting production in 2022, becoming TI’s fourth 12-inch wafer fab.
LFAB2 produces analog and embedded semiconductors, and broke ground in 2023. This factory, costing $11 billion, represents the largest economic investment in Utah’s history, creating approximately 800 additional TI jobs and thousands of indirect jobs, with the earliest production expected in 2026.
Currently, TI has not explained the specific reasons for the layoffs, but industry insiders speculate that the layoffs are primarily due to insufficient capacity utilization at the plant.
Compared to other major companies, TI‘s layoffs are not significant.
In May of last year, TI was reported to have disbanded its MCU R&D team at its Shanghai research center in China, relocating the original MCU R&D line to India. This news was confirmed in November.
In addition to layoffs, TI has several indicators that have turned red.
From a performance perspective, TI‘s revenue has shown a significant decline since the fourth quarter of 2022, with a year-on-year decline starting from the fourth quarter of 2022 (approximately -3%), continuing into 2023 and 2024, lasting nearly two years, until the year-on-year decline in the fourth quarter of 2024 shrank to -1.7%.
TI‘s inventory levels are also not optimistic. At the end of the fourth quarter of 2024, the inventory was $4.5 billion, an increase of $231 million from the previous quarter, with inventory days at 241 days, an increase of 10 days quarter-on-quarter. It is expected that the inventory level in the first quarter of 2025 will further increase, possibly exceeding $1 billion, and then stabilize around that level.
TI also stated that supply-demand imbalance still exists. The once industry giant is facing unprecedented challenges.
ST: Large-scale layoffs, even facing split challenges
Coincidentally, ST has also recently announced significant personnel adjustments.
This month, ST CEO Jean-Marc Chery announced that the company expects 5,000 employees to leave in the next three years, including the previously announced 2,800 layoffs earlier this year. It is reported that about 2,000 will leave due to natural attrition, and with voluntary departures, the total number of departures will reach 5,000.
In November of last year, STMicroelectronics detailed its cost-cutting plan, aiming to save hundreds of millions of euros by 2027, including reducing staff through natural attrition and early retirement.
At the same time, according to a report from one of Italy’s largest media outlets, La Stampa, on June 4, the French and Italian governments and relevant shareholders plan to study the potential split of ST.
Amid the rise of new energy vehicles, ST was once one of the “big winners” in the chip market. However, as demand declines, ST has also inevitably fallen into a passive position.
Looking at specific performance, in 2024, ST’s revenue and profit fell by 23.24% and 63.03%, with the net profit growth rate in the first quarter of 2025 at -89.08%, marking the lowest quarterly profit growth rate in nearly a decade.
In terms of specific products, those related to automotive analog, power discrete devices, MCU and others have all seen significant declines. Notably, ST’s financial report highlighted the company’s competition and volatility risks in the analog, MCU and SiC markets.
In its core revenue-generating MCU products, the market share of general-purpose MCUs in China continues to decline due to the influence of domestic manufacturers such as GigaDevice. Automotive MCUs are also impacted by leading manufacturers like Infineon and the localization efforts of mainland Chinese manufacturers.
So how are domestic MCU companies performing? It is reported that companies such as NXP, GigaDevice, and Giga Semiconductor have successively launched products that compete with TI and ST, beginning to engage in direct competition with international leaders.
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02Domestic MCUs: Competing Head-On with International Giants
TI C2000 faces numerous challengers
In the journey of MCU localization, real-time control is considered the toughest “hard nut to crack”.
For many years, TI C2000 has dominated the real-time control field. Even giants like Microchip, ST, and Renesas that have made strides in power and motor control have not been able to shake TI C2000’s position.
In recent years, with the rise of domestic MCU manufacturers, many markets have begun to see the presence of domestic MCU manufacturers. Even the previously seemingly unshakable C2000 is gradually losing ground in motor control, inverters, and servos.
NXP and Giga Semiconductor and other domestic companies have taken the initiative to directly compete with TI C2000 series products, launching attacks on this technological stronghold.
For example, NXP has launched the NS800RT5 and NS800RT3 products, precisely targeting TI C2000 models such as F280039 and F280049.
In terms of technology, users of real-time control systems are most concerned about the core issue. It is well known that C2000 is TI’s proprietary DSP core, while NXP adopts the commonly used Arm Cortex-M7 core and introduces its self-developed eMath mathematical acceleration core, which significantly enhances mathematical computation capabilities compared to the general Arm Cortex-M7 in digital signal processing operations such as trigonometric functions, square roots, exponentials, logarithms, Fourier transforms (FFT), matrix operations, and FIR filtering.
In addition to the improvement in computing power, NXP has also made improvements in the expansion of storage and key real-time peripherals in the NS800RT series.
More features at no extra cost is also one of NXP’s advantages.
According to NXP’s MCU market director, Song Kunpeng, although it is a direct competition, the product definition process is not a complete copy, but rather a comprehensive innovation based on customer pain points in terms of real-time performance, scalability, and security, which are clearly key aspects of real-time control MCUs. Of course, considering that TI’s two products were launched several years ago, it is natural for newcomers to innovate and upgrade.
Recently, Giga Semiconductor officially released the G32R501 real-time control MCU based on the Arm Cortex-M52 dual-core architecture and supporting Arm Helium technology, officially entering the market dominated by TI C2000.
According to reports, the G32R501 real-time control MCU is based on the Arm v8.1-M architecture, featuring a new generation of high-efficiency processors with excellent real-time computing performance, achieving 2.7 times DSP performance and 5.6 times ML performance improvement while maintaining easy migration from Cortex-M4F and Cortex-M33. This is mainly due to the extensions brought by Arm on this architecture— Helium. As a vector extension (MVE) of the Arm Cortex-M processor series, Helium technology provides significant performance improvements for machine learning (ML) and digital signal processing (DSP) applications.
Based on the above hardware configuration, and leveraging Giga’s ACI CDE (Customer Datapath Extension) interface, it can perfectly integrate Giga’s self-developed Zidian mathematical instruction extension unit with the Cortex-M52 core, enabling support for FFT operations, complex mathematical operations, trigonometric functions, Fourier transforms, and various mathematical acceleration operations at the instruction set level, further enhancing real-time control computing efficiency and significantly reducing CPU access latency.
In addition, this chip also supports TCM and has enhanced real-time control capabilities.
Although these companies are not yet a threat to C2000’s throne, it is certain that C2000 is facing market pressure.
The reasons are twofold: on one hand, some products in the market do not have high real-time control requirements; on the other hand, these markets require a bus architecture for interoperability, which is precisely what the C2000 core lacks and what Arm excels at. Additionally, pricing and market strategies are also reasons why C2000 is starting to lose ground. As NXP CEO Wang Shengyang stated, the years of chip shortages have made users realize that “it is very unsafe for such a critical category of products to be solely supplied by one company.”
STM32 is no longer alone
In the general MCU market, competition between domestic MCU brands like GD32 and STM32 is becoming increasingly fierce.
GigaDevice’s GD32, as a leader in the Chinese 32-bit general-purpose MCU field, has secured an important position in the market with over 200 million units shipped, more than 10,000 users, and a vast array of over 300 product models across 20 series. GD32 adopts the Cortex-M3 core, achieving full compatibility with STM32 of the same model, facilitating user replacements, and has a higher main frequency, successfully replacing STM32 in numerous fields such as smart home and industrial control.
Zhongke Core’s 32-bit MCU products can replace STM32’s F103, F030, F031, and F051 series in bulk. Based on the ARM architecture, it covers eight major series of products with Cortex-M0, M3, and M4 cores, with hardware pin compatibility with STM32 P2P, and software designed for register-level compatibility, allowing HEX files developed for ST series MCUs to be directly programmed into the corresponding Zhongke Core MCU models without significant modifications.
Lingdong Microelectronics‘s MM32 series, based on ARM Cortex-M0 and Cortex-M3 cores, includes: MM32F series for general high-performance markets, MM32L series for ultra-low power and secure applications, MM32W series with various wireless connectivity features, MM32SPIN series for motor drive and control, and OTP-type MM32P series, all of which are fully compatible with ST, resulting in low replacement costs.
Giga Semiconductor ‘s general MCU APM32 series is designed based on the ARM Cortex M3 series CPU, featuring a self-designed 32-bit CPU. APM32F030, APM32F103, and APM32F072 can directly replace the corresponding STM32 models.
In addition, many domestic MCU companies such as Yateli, Guomin Technology, Xinhai Technology, and Huada Semiconductor also have products that can directly compete with STM32.
03Waiting for a Breeze: The MCU Market Has Changed
Domestic MCUs are rising, but they are also extremely competitive. This is the current situation.
Faced with the cost advantages of domestic MCUs, imported brands are losing in this price war. The impact is not limited to ST and TI.
It is reported that in some product areas, frequent price comparisons have become the norm, and even if a certain domestic MCU has been selected, there is always the possibility of switching to a lower-priced alternative.
The price war is the result of multiple factors. On one hand, the global semiconductor capacity expansion has led to an oversupply in the MCU market; on the other hand, the market demand structure has changed, with consumers increasingly demanding cost-performance ratios, which domestic MCUs happen to meet. In addition, domestic MCU manufacturers are continuously optimizing production processes and supply chain management, further reducing costs and providing solid support for price competition.
The changes in market dynamics are reflected not only in price competition but also in aspects such as foundry cooperation and supply chain adjustments. ST announced that it will entrust the production of 40nm process node MCUs to Hua Hong Semiconductor, breaking the previous industry pattern. For ST , this move allows it to optimize its capacity layout by leveraging Hua Hong Semiconductor’s capacity and cost advantages; for Hua Hong Semiconductor, it is a good opportunity to enhance technology and expand the market.
NXP has also sent positive signals, stating that it will establish a dedicated chip supply chain for Chinese customers. Behind this is the increasing importance of the Chinese market and the competitive pressure brought by domestic MCUs.
Establishing a dedicated supply chain will help NXP improve its response speed and service quality in the Chinese market, enhance customer loyalty, and also alleviate the competitive pressure brought by domestic MCUs.
Looking ahead, the changes in the MCU market dynamics will bring new opportunities and challenges. Domestic MCUs are expected to achieve breakthroughs in high-end markets, breaking the monopoly of international giants through technological innovation and product upgrades. At the same time, cooperation between international and domestic manufacturers in technology research and development and market channels may become more frequent, achieving complementary advantages. The future of the domestic MCU industry is worth watching.
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Note: The cover image of this article is sourced from Freepik, self-made by the author, and publicly available media, all authorized.
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