Qualcomm gearing up to take top MCU vendor spot

Article By : Dylan McGrath

Qualcomm claiming the microcontroller lead next year shows how the industry's unprecedented level of large-scale consolidation is reshaping vendor ranking lists.

Acquiring rival Freescale Semiconductor has helped Dutch chip vendor NXP Semiconductor NV secure the top spot in global microcontroller sales in 2016. Next year, that mantle could well belong to Qualcomm, assuming its $39 billion acquisition of NXP is finalized by the end of this year as planne.

Following the December 2015 close of its $12 billion Freescale acquisition, NXP saw its 2016 microcontroller sales total increase by 116% to $2.91 billion, good for about 19% of the total market, according to market research firm IC Insights Inc.

Figure 1: Leading MCU suppliers (Source: IC Insights)

That Qualcomm—a fabless chip giant best known for its cellular chips that has never marketed a microcontroller—could claim the microcontroller lead next year illustrates the degree to which the semiconductor industry's unprecedented level of large-scale consolidation in recent years is reshaping the industry and vendor ranking lists.

The microcontroller segment in particular has undergone tremendous upheaval, with the ranks of the top three vendors being redrawn already several times in the past two years.

But Rob Lineback, senior market research analyst at IC Insights, told EE Times that Qualcomm should have little trouble adjusting to the microcontroller business. After all, Lineback noted, most of the microcontrollers in NXP's portfolio are based on the ARM architecture, just like Qualcomm's chips.

"It is a different type of business than application processors, but similarities in the architecture and development tools should help Qualcomm be successful in microcontrollers," Lineback said in an email exchange.

Qualcomm has also been singled out by Apple as its toughest foe (See: Why Qualcomm is iPhone's real competitor). This year, we're about to see the major rivalry of the Samsung Galaxy S8 and the to-be-announced Apple iPhone 8. But under the hood of the S8 is the Qualcomm Snapdragon 835 processor versus the Apple-designed A9 or possibly a speculated-about newer model A10. The performance of these new mobile phones will be directly attributable to which processor platform best satisfies mobile users.

But with so many market dynamics in flux, Qualcomm's reign as top MCU vendor might well be short, Lineback added. "We'll see," he said. "The competition is fairly intense and other acquisitions are likely."

NXP's rise in the microcontroller rankings in 2016 edged Japan's Renesas Electronics from the top spot, a position it held for several years. Renesas, which as recently as 2011 sold one in three microcontrollers worldwide, has suffered a precipitous fall in sales in recent years due largely to the weak yen exchange rate, punctuated by a 19% decline in 2015. Renesas's microcontroller sales declined another 4% in 2016 to $2.5 billion, good for about 16% of the total microcontroller market, according to IC Insights.

First published by EE Times U.S.