MCUs: The Fundamental Component of Modern Electronics
Microcontroller Units (MCUs) serve as the essential yet often overlooked foundation for contemporary electronic devices. These versatile units are integral to billions of devices, enabling critical functions such as control, sensing, and communication across a multitude of sectors. By consolidating a processor, memory, and input/output peripherals into a single low-power chip, MCUs find applications in an array of environments, from everyday household items and wearable technology to vehicles and industrial equipment.
The Role of IoT MCUs in Connectivity
Unlike traditional MCUs, IoT MCUs are tailored specifically for connected devices. They combine processing and control functionalities while incorporating or supporting various communication interfaces. As the Internet of Things (IoT) continues to proliferate, these MCUs are becoming crucial for low-power, always-on applications, including smart meters, industrial sensors, and connected vehicles.
Market Growth Projections for IoT MCUs
According to the "IoT MCU Market Report 2025–2030" from IoT Analytics, global spending on MCUs reached $23.2 billion in 2024. This encompasses both IoT and non-IoT MCUs and is projected to grow at a compound annual growth rate (CAGR) of 3.9%, reaching an estimated $29.4 billion by 2030. This growth aligns with the rapid advancement of global connectivity technologies, with expectations that the number of connected IoT devices will surpass 40 billion by 2030. As the market recovers and technology evolves, suppliers must remain vigilant about emerging trends to maintain competitiveness.
Factors Driving IoT MCU Expansion
The distinction between IoT MCUs and conventional MCUs extends beyond the mere addition of communication modules; it encompasses a holistic enhancement of the underlying concept and ecosystem. The global MCU market is anticipated to approach $30 billion by 2030, with the IoT MCU sector thriving significantly. The report indicates that the IoT MCU market was valued at $5.1 billion in 2024, showing a 9% decrease from 2023 primarily due to inventory adjustments within the supply chain. However, analysis from early 2025 revealed a robust recovery, with IoT MCU revenues increasing by 1.8% year-on-year. The IoT MCU market is expected to sustain steady growth, achieving a CAGR of approximately 6.3% by 2030, potentially reaching $7.32 billion.
Key Growth Drivers for IoT MCUs
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Emerging Demand for Automation Enhancements
The industrial IoT market witnessed a downturn in growth during 2023 and 2024, marking the slowest pace since IoT Analytics began tracking the sector in 2014. The hardware sector, which includes automation and semiconductor segments, faced significant challenges, leading many companies to delay hardware upgrades. However, IoT Analytics forecasts a rebound in 2025 as enterprises are poised to activate postponed demands for automation enhancements, which rely heavily on MCU-driven PLCs, IPCs, and gateway devices. -
LPWAN Initiatives Stimulate IoT MCU Demand
The "Global Low-Power Wide-Area Network (LPWAN) Tracking and Forecast Report 2015–2027" by IoT Analytics reveals that nearly 1.3 billion LPWAN IoT connections exist worldwide, constituting about 8% of all connected IoT devices in 2023. The forecast suggests that LPWAN connections will grow at a staggering CAGR of 26%, reaching 3 billion by 2027. With the rollout of NB-IoT and LoRaWAN technologies, LPWAN chipset shipments are expected to increase by 8% year-on-year in 2025. Sectors such as transportation, smart cities, and infrastructure are rapidly expanding, with smart meters leading in volume. Government initiatives to deploy smart meters, such as India’s plan to install 250 million by 2027, are catalyzing extensive implementations. Each LPWAN device requires an MCU to manage its communication module, ensuring persistent demand. -
MCUs as Central Components for Edge AI
Previous discussions from the IoT Think Tank have highlighted the momentum of edge AI—where AI processing occurs on devices rather than relying solely on cloud servers. This transition offers three main advantages: it reduces data transmission latency, enhances data privacy by minimizing cloud uploads, and lowers energy consumption associated with cloud data transfer. The rise of generative AI has notably increased data center power demands, with generative AI searches consuming ten times more energy than traditional searches. As a solution, alongside deploying energy-efficient chips in data centers, shifting AI tasks to edge devices proves effective. A hybrid AI structure can leverage both cloud and edge computing benefits. Devices such as smartphones, PCs, and vehicles can efficiently utilize smaller models for tasks, minimizing cloud reliance. IoT Analytics posits that edge AI may become a pivotal trend in industrial AI, facilitated by the development of dedicated edge computing hardware like MCUs, enabling constant inference capabilities. - Asia, Particularly China, Emerges as a Growth Hub
The geographical focus of the IoT MCU market is increasingly leaning towards Asia, with data indicating market contractions across all regions in 2024. However, Asia is expected to demonstrate the most substantial recovery in 2025, with China leading this growth. China’s recent substantial investments in energy infrastructure projects are crucial, with IoT MCUs playing significant roles. For instance, the State Grid of China announced an $88 billion investment in January 2025 to enhance the power grid and improve distribution infrastructure. Projections indicate that the Chinese market will sustain rapid growth momentum through 2030.
Technological Innovations Shaping the IoT MCU Landscape
Technological Change 1: The Rise of RISC-V Architecture
The ongoing technological tensions between the U.S. and China have escalated the RISC-V Instruction Set Architecture (ISA) from a mere option to a strategic imperative. Reports suggest that China is preparing to implement nationwide policies promoting the adoption of open-source RISC-V chips to decrease reliance on Western technologies. If enacted, this policy will mark the first national directive endorsing RISC-V, establishing its strategic importance. The promotion of RISC-V in a significant market like China is expected to enhance its global ecosystem, foster the development of software and tools, and facilitate cross-border capital and technology exchanges. Beyond mandatory policies, many manufacturers are increasingly adopting RISC-V for its flexibility, cost-effectiveness, and energy efficiency. Unlike proprietary architectures like ARM, which require licensing, RISC-V operates on an open, royalty-free model, allowing companies to design and tailor processor cores without incurring licensing fees, thus reducing dependence on a limited number of suppliers.
Technological Change 2: Emphasis on Energy Efficiency
Currently, MCU design prioritizes ultra-low power consumption to support long-lasting IoT deployments powered by batteries. As IoT applications evolve into energy-constrained environments, MCU manufacturers are incorporating advanced power management features, including deep sleep modes and adaptive voltage control, to dramatically lower energy usage. This focus directly correlates with reduced operational costs and supports new business models centered on long-lasting devices. Notable examples include STMicroelectronics’ STM32WL33, designed for smart meters and industrial IoT applications with a current consumption as low as 4.2 µA, allowing for battery life of up to 15 years. NXP’s MCX L series also exemplifies this trend, utilizing a 40-nanometer ULP process to enhance energy efficiency significantly.
Technological Change 3: Integrating Edge AI into MCUs
Advanced AI and machine learning capabilities are transitioning from cloud environments directly into chips, enabling real-time intelligent decision-making. This integration transforms MCUs into centers for intelligent processing, allowing manufacturers to enhance value by advancing software capabilities and generating revenue from AI-based applications while benefiting from reduced latency, improved data privacy, and less dependency on cloud infrastructure. Examples of this integration include STMicroelectronics’ STM32N6 series, featuring a Neural-ART accelerator for improved machine learning performance, and Infineon’s PSOC Edge series, designed to augment intelligence in IoT and industrial applications.
Technological Change 4: The Necessity of Secure MCUs
As IoT deployments scale, it becomes imperative to safeguard sensitive data, thwart cloning attempts, and maintain data integrity from device to cloud. This necessity has led to the widespread implementation of secure MCUs and dedicated hardware security elements, such as Secure Elements (SE) and Trusted Platform Modules (TPM), to establish a Hardware Root of Trust (HRoT). Secure MCUs incorporate features like secure boot, device authentication, and encrypted data storage, creating a trusted execution environment separate from regular operations. SEs and TPMs act as independent security "vaults," collectively ensuring device security, enabling secure firmware updates, and protecting user privacy. The recognition among IoT manufacturers that hardware security is a fundamental requirement has accelerated the adoption of secure MCUs and HRoT solutions.
In Summary
The evolution of IoT MCUs reflects the broader trend of embedding intelligence within interconnected systems. By merging traditional control logic with advanced networking capabilities and robust security measures, these compact systems are poised to become integral components of the intelligent world. As AI, edge computing, and low-power networks become increasingly intertwined, IoT MCUs are set to evolve from mere control chips into essential computing units that facilitate human-machine interaction and drive industrial digital transformation. Just as microprocessors propelled the information society over the past two decades, IoT MCUs are destined to serve as the foundational engines of the forthcoming era of the Internet of Everything.
