Chinese microcontroller unit (MCU) suppliers have seen orders from the Chinese domestic market increase due to the government-led self-sufficiency push, according to industry sources.
It has been reported that Texas Instruments (TI) has laid off its MCU team in China and will move its original MCU product line to India. With TI's MCU team and product line leaving China, Chinese MCU players will have more opportunities to promote domestic MCU replacement.
Chinese semiconductor manufacturers entered the MCU industry during the pandemic, taking advantage of shortages and price increases. Strong end demand for consumer electronics at that time resulted in severe customer overbooking. This led to the rise of Chinese MCU makers, causing fierce market competition, significant price fluctuations, and a long period of intense price cutting.
Major tier 1 MCU makers in China include GigaDevice Semiconductor, Nations Technologies, Chipsea Technologies, SemiDrive Technology, and C Core Technology. In addition to consumer electronics, Chinese MCU players are expanding into industrial control, automotive, and AIoT applications. Tier 2 and 3 MCU makers focus on 8-bit MCUs for consumer electronics and smart home appliance customers.
Today, China's MCU market is still led by international makers, such as STMicroelectronics, NXP Semiconductors, TI, Microchip Technology, and Renesas Electronics. The domestic production rate of local Chinese MCU makers is still low and is concentrated in the consumer sector.
Amid continued tense US-China relations, more and more Chinese brand customers have requested "de-Americanization," with local companies trying not to use products from American manufacturers, according to MCU makers. This has caused major international manufacturers to begin shifting their strategies in China.
On the other hand, more and more international brand customers are requesting the "de-Chinaization" of manufacturing processes. As a result, in addition to considering the increased competition in the Chinese market, MCU makers are also looking at the concerns of international customers related to geopolitics, leading to a reduced focus on the Chinese market and more attention on overseas markets.
Although the previous wave of price cuts in the Chinese market has eased and rumors of Chinese MCU makers' quotations gradually rebounding, there has yet to be any large-scale price increase. This is mainly due to the continued launch of cost-effective products by major international manufacturers.
As major European and US manufacturers such as TI, NXP, and Micron Technology continue to slow down their China market deployments due to geopolitical considerations, it is undoubtedly a great opportunity for local Chinese manufacturers to push the domestic substitution of MCUs. At the same time, local Chinese makers now have a chance to hire the talent released by TI to accelerate China's MCU development.
Article translated by Eifeh Strom
