After experiencing a crazy shortage in 2021, the MCU (Microcontroller Unit) market has seen a reversal in supply and demand, entering a phase of oversupply over the past two years, with manufacturers feeling the market pressure. Faced with weaker industry demand, more intense price competition, and tighter funding, companies must decide whether to retreat and maintain their positions or to actively advance, which tests the decision-makers’ resolve. GigaDevice’s answer to this is the latter.
Recently, GigaDevice held a product launch event in Shanghai, unveiling three new products primarily aimed at the industrial market: the high-performance GD32G5 series microcontrollers based on the Arm Cortex-M33 core, the ultra-high-performance industrial interconnect microcontrollers GD32H75E series based on the Arm Cortex-M7 core, and the EtherCAT slave controller GDSCN832 series.
Compared to previous products, these new offerings significantly enhance computing power and performance, with specific optimizations for particular industry applications. They also launched a series of motor control and digital energy solutions equipped with the new MCU products. As GigaDevice puts it, this product launch not only demonstrates their ongoing focus and firm commitment to the industrial and digital energy sectors but also reflects the close cooperation with industry partners and a solid market foundation.
What is the size of the mid-to-high-end MCU market?
Aside from the notable shortage from 2020 to 2022, MCUs have often remained in the background, unlike star products such as AI chips that consistently dominate industry discussions. However, this does not mean that MCUs are unimportant; on the contrary, they are widely used and can be found in almost all electronic devices with slightly complex functions. In various devices or modules, the MCU is the master of the device’s or module’s functions, with its quality, reliability, and safety metrics determining the performance of that device or module.
Due to their broad application range, the market size for MCUs is substantial. According to market research firm Yole, the global MCU sales revenue in 2023 is projected to be $28.2 billion. The average selling price has risen from $0.60 in 2020 to $0.93 in 2023, thanks to supply chain disruptions caused by the COVID-19 pandemic. However, after the market supply and demand shifted, manufacturers engaged in price wars to reduce inventory, leading to a significant drop in the average selling price of MCUs, which is now gradually approaching 2020 levels.
If we consider MCUs priced at $1 and above as mid-to-high-end MCUs, public data from market research firms indicates that the mid-to-high-end MCU market size is approximately between $18 billion and $21 billion, accounting for about 60% to 70% of the total market. The low-end MCU market (with market prices below $1) is estimated to be between $9 billion and $12 billion, representing about 30% to 40% of the total market. Thus, the mid-to-high-end market is the main battleground for MCUs, where international giants currently hold an absolute advantage. In the low-end market, domestic MCU products can still compete on price, but in the mid-to-high-end market, a good price alone is not enough to win.
In fact, looking at the overall MCU market, it is still dominated by international giants. According to market research firm Omdia, by the end of 2022, the top three MCU manufacturers held a combined market share of 50.3%, while the top five accounted for 76.8%. GigaDevice, ranked first among domestic manufacturers, is seventh globally, with a market share of only 1.8%, indicating a significant gap with the top five MCU manufacturers. However, from another perspective, this also indicates a vast space for development.
What are the characteristics of mid-to-high-end MCU customer demands?
Domestic MCUs are primarily concentrated in the low-end market, especially low-end 32-bit MCUs, with prices dropping below RMB 0.5, rapidly replacing the market share of mid-to-high-end 16-bit and 8-bit machines. While the low-end market is fiercely competitive, domestic MCU manufacturers have a negligible share in the high-end market.
Why do high-end MCU customers not choose domestic suppliers? According to TechSugar, high-end MCU manufacturers often have deep roots in specific application markets, resulting in high customer stickiness. The gross margins of complete machines built around high-end MCUs are high, and customers have little motivation to switch MCUs based solely on price. A typical example is TI’s C2000 series, which is widely used in automotive and general energy sectors, with prices generally above $2, and automotive-grade versions exceeding $5. Due to continuous optimizations for applications such as motor control, solar inverters, and digital power over thirty years, C2000 has built a massive user base. Even with other international giants eyeing these markets, no one has truly captured C2000’s users yet.
Chen Siwei, Product Marketing Director of GigaDevice’s MCU Division, told TechSugar that in the high-end MCU application market, the core value proposition for customers is high quality. From the initial product definition stage, GigaDevice engages in in-depth communication with leading customers to create differentiated MCU products that meet customer needs, while also ensuring an extremely stable supply chain to guarantee timely market delivery.
Chen emphasized that merely cutting prices is not enough to attract mid-to-high-end customers. Only by deeply understanding customer needs in application scenarios and effectively addressing their pain points can a company become a core supplier for high-end MCU customers.
Chen Siwei, Product Marketing Director of GigaDevice’s MCU Division
How does GigaDevice navigate the high-end MCU landscape?
Since launching its first GD32 MCU in 2013, GigaDevice has made rapid strides in the 32-bit general MCU market, surpassing 100 million units shipped by 2017. By 2023, GigaDevice has ranked first among domestic manufacturers in the 32-bit general MCU market for eight consecutive years, with an expected annual shipment of over 400 million units in 2024. The current product lineup supports architectures including Cortex M3/M4/M23/M33 and M7, establishing the most comprehensive product portfolio among domestic MCU manufacturers, serving over 20,000 customers, and continuously penetrating industrial applications in recent years. The three new product series launched on this basis represent GigaDevice’s determination to further explore the industrial and energy markets through high-end MCUs.
As mentioned earlier, unlike the mid-to-low-end market, high-end MCU customers are relatively insensitive to price and have high demands for performance and quality, as well as stable supply chains. Therefore, succeeding in this market is not easy. How does GigaDevice plan to enter this market?
From the insights shared by GigaDevice executives at the product launch event, I summarize GigaDevice’s approach in 16 characters: strong R&D, strict quality control, combined strikes, and comprehensive support.
First, let’s look at R&D. GigaDevice has nearly 600 personnel focused on MCU R&D, with 80% holding master’s degrees or higher. After years of accumulation, GigaDevice has established multi-dimensional technical capabilities around MCUs, including storage, sensing, analog, RF, and AI algorithms, greatly expanding the applicable scenarios for GigaDevice MCUs.
In addition to the chip design capabilities typical of ordinary chip design companies, GigaDevice has also invested in human resources to collaborate with wafer fabs to develop production processes specifically optimized for GigaDevice MCU products, jointly establishing DFM (Design for Manufacturability) and DFR (Design for Reliability) rules suitable for GigaDevice MCUs.
Furthermore, GigaDevice has developed its standard cell library and a large number of customized modules to achieve better and exclusive performance and reliability. For example, the GD32G5 series MCU, based on the M33 core, can achieve a higher clock frequency than competitors on the same platform after internal optimization of the standard process library. GigaDevice’s CTO and MCU Division General Manager, Li Baokui, stated, “If we do not adopt the COT (Customer Owned Technology) process for development, it may be challenging to reach this frequency.”
Li Baokui, CTO and General Manager of GigaDevice’s MCU Division
Next, let’s discuss quality. GigaDevice considers potential issues in production during product design, controlling production quality from the source through self-developed DFM and DFR design rules. To better monitor production conditions, GigaDevice collaborates with wafer fabs to establish production line monitoring plans, using automated tools to monitor wafer online status and output data almost in real-time, directly responsible for yield and quality improvement.
In the backend testing phase, GigaDevice collects and analyzes data from key points in the packaging process, fully responsible for chip testing plans and using professional tools to monitor testing conditions in real-time. Even the shipment control is executed by GigaDevice’s system, intercepting all issues before delivery to customers.
To further enhance product quality, since 2022, GigaDevice has proposed a “zero defect” quality goal with suppliers, collaboratively establishing a “zero defect” quality management system and promoting a “zero defect” quality culture. The “zero defect” quality initiative has now entered its second phase, with GigaDevice aiming to focus on reducing defects in product and business processes over the next two years, forming a Task Force Team with suppliers to systematically improve key failure modes.
Additionally, there are collaborative advantages. In the mid-to-high-end application market, the price of MCUs is often not the determining factor for overall machine costs. If MCU products lack sufficient stickiness for customers, GigaDevice offers high-quality products in flash memory, sensors, power management, and signal chains, and by providing bundled solutions with partners, can supply all core essential chips for customers’ machines or modules. This not only provides customers with cost-effective and reliable solutions but also saves them time in component selection.
At this launch event, GigaDevice and partner Navitas Semiconductor introduced the new CRPS185 4.5kW AI data center server power solution. This solution relies on GigaDevice’s GD32G553 MCU, along with Navitas’ GaNSafe™ high-power GaN power chips and GeneSiC™ third-generation fast silicon carbide power devices, showcasing excellent performance with an ultra-high power density of 137W/in³ and over 97% efficiency.
Finally, let’s look at technical support. Producing high-performance MCUs is just the first step; how to enable customers to use them cost-effectively and efficiently is key. Chen Siwei stated that customers are more likely to consider replacements only when they see mature and usable solutions, which requires GigaDevice’s technical team to create complete solutions for specific applications, demonstrating the capabilities of GigaDevice’s high-end MCUs to customers.
Chen believes that local manufacturers have a natural advantage in technical support. For instance, GigaDevice’s core R&D and technical personnel are all based in mainland China. When issues arise on-site, FAE (Field Application Engineers) can resolve them immediately. If FAEs cannot solve the problem, they can quickly seek assistance from local AEs (Application Engineers) and chip designers. He said, “Our core R&D is all in mainland China, which is closer to local customers, and our response speed and service quality are our competitive advantages. For example, with the newly launched GD32G5 series, GigaDevice has differentiated products and mature solutions aimed at customer applications, and we are confident in capturing a share of the industrial market.”
Conclusion
The launch of these three products fulfills GigaDevice’s commitment to entering the high-end MCU market. However, compared to international giants, the leading advantages in this field remain significant, and domestic MCU manufacturers still hold a negligible market share. The path to high-end development will not be achieved overnight, but just as local companies once rarely ventured into the 32-bit MCU market, they are now everywhere. The journey of domestic MCU manufacturers into the high-end market has begun; although their strength is still small and their goals are far-reaching, the hope is growing.
As Li Baokui stated, “GigaDevice occupies a leading position in the domestic market with its extensive product line and outstanding R&D capabilities. GigaDevice’s products have earned a good reputation among customers for their consistent high quality, and its current scale is continuously expanding, indicating strong competitiveness in future markets. Additionally, GigaDevice has a robust supply chain management strategy that ensures business continuity and stability. These comprehensive advantages are the key elements sought by GigaDevice’s mid-to-high-end customers.”
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