As terminalproducts continue to upgrade, the market application of microcontrollers (MCUs) is generally iterating towards 32-bit, leaving less space for 8-bit and 16 bit MCUs. Among the latter two, although 16 bit MCUs have stronger performance, their situation is even more disadvantaged.

The reason behind this is that 32-bit MCUs are gradually penetrating downwards, while 8-bit MCUs strictly adhere to cost sensitive applications, squeezing the living space of 16 bit MCUs from both directions. With the continuous development of technology and market, 16 bit MCUs may become "invisible", but it is also possible that this category will be tapped into new vitality and repositioned.

Cost effectiveness disadvantage: significant squeezing effect at both ends

In terms of low-end applications, 8-bit MCUs have the most prominent features of low power consumption and low cost. For some cost sensitive and functionally limited applications, such as low-end home appliances and toys, they are still the most reasonable choice.

Of course, 8-bit MCUs have also benefited from advances in semiconductor technology. The processing power of 8-bit MCUs today has increased hundreds of times compared to products from the 1970s. Some high-end 8-bit MCUs can even replace the ecological niche of some 16 bit MCUs, winning with ultimate cost-effectiveness.

Currently, 8-bit MCUs still hold a significant market share due to their long-term applications in specific fields and a large user base. Microchip\Silicon Labs\ Infineon, Renesas and other original manufacturers are also maintaining rich 8-bit MCU product lines.

On the other hand, in recent years, the price of 32-bit MCUs has been continuously decreasing, while their performance and power consumption have become increasingly excellent. This has made 32-bit MCUs more cost-effective in many applications, providing more powerful functions at relatively low costs, thus attracting many customers who originally used 16 bit MCUs to switch to 32-bit MCUs.

Among them, ST, as a traditional MCU manufacturer, even directly launched the STM32C0 product line in 2023 with the slogan "Your next 8-bit machine will be a 32-bit machine". This product aims to bring more cost sensitive applications directly into the 32-bit MCU ecosystem by lowering its price to $0.21 while providing 32-bit performance and sufficient peripherals.

It can be seen that once 32-bit MCUs pursue cost-effectiveness, they can even compete head-on with 8-bit machines, while 16 bit MCUs are naturally squeezed between these two and find it difficult to find a positioning. For chip companies, only by focusing on the 32-bit market can they gain opportunities in the increasingly competitive MCU market.

Domestic chips aim for 32-bit MCU 'one-step solution'

The continuous advancement of semiconductor technology has lowered the threshold for 32-bit MCUs. The competitive atmosphere in the domestic market is becoming more intense, and domestic manufacturers are paying more attention to the competition in the 32-bit market, benchmarking imported products such as STM32 and C2000, and continuously optimizing cost-effectiveness. At present, Zhaoyi Innovation, Lingdong Micro, Jihai Semiconductor, Xiaohua Semiconductor and other companies have high-quality solutions to serve important markets such as consumer, industrial, automotive, and medical.

The withdrawal of Texas Instruments' MCU R&D department from the Chinese market earlier is directly related to the weakened competitiveness of its 16 bit product MSP430. Faced with increasingly mature domestic 32-bit MCU products, the advantage of the 16 bit solution is no longer significant. And Texas Instruments' own research and development focus has already shifted towards 32-bit products.

From the perspective of the local market, various household appliances are pursuing intelligence, and under this demand, chip companies are naturally focusing on the layout of two MCUs. Based on the ARM architecture, the software and hardware ecosystem has greatly improved the research and development and promotion process of chip companies, becoming the most popular choice for enterprises. The RISC-V architecture is suitable for end-to-end AI devices due to its simpler instruction set, and due to its open-source nature, it plays a more important role in supply chain security.

Overall, the characteristics of the domestic application market are that the use of 32-bit MCUs can meet current needs while leaving room for future upgrades. Therefore, manufacturers are reducing their investment in 16 bit products, and the application side tends to upgrade directly to 32-bit systems, becoming a two-way choice.

16 bit MCU Opportunity: Focusing on Differentiation
Due to reasons such as solution stability, 16 bit MCUs are still playing a role in some industrial sensors, medical equipment, and other long life cycle devices. In addition, 16 bit MCUs still have a place in the powertrain systems of some cars. But with the increasing popularity of 32-bit MCUs, these application devices that adhere to 16 bit MCUs are likely to iterate in the future.
But even at a disadvantage, 16 bit MCUs have not yet reached the point of complete retirement. If the idea of bidirectional squeezing is reversed, a 16 bit MCU can provide stronger performance than an 8-bit machine, while also achieving smaller packaging and lower power consumption than a 32-bit MCU, just enough to meet specific requirements for card placement. For example, Renesas launched the RL78/G15 series products in 2023, targeting the home appliance market, with a focus on replacing 8-bit machines with 16 bit MCUs to improve performance, solve the problem of insufficient peripherals, and ensure cost-effectiveness advantages.

It can be seen that emphasizing differentiation and cost-effectiveness will be the ultimate way out for 16 bit MCUs. The competition in the MCU market is becoming increasingly fierce, and the competition and integration of various solutions will also intensify. Fully assessing market demand and developing products with differentiated competitiveness are the fundamental basis for major manufacturers to establish themselves.