Chinese microcontroller unit (MCU) firms have observed a resurgence in demand and expressed optimism about their full-year 2024 sales results. Several Chinese MCU firms have reported growth in their third quarter of 2024 sales, driven by government subsidies stimulating replacement demand in consumer markets. Leading Chinese MCU vendor GigaDevice has indicated strong potential for achieving record shipments in 2024.
GigaDevice sees momentum building
Following prolonged inventory correction, GigaDevice reported its MCU business reached its lowest point at the end of 2023, with shipments steadily rising each quarter since then. While many other MCU vendors remained cautious about the Chinese market's recovery in 2024 until the third quarter, recent government programs have successfully stimulated demand, resulting in many Chinese MCU vendors reporting more than 30% year-over-year sales growth for the third quarter.
GigaDevice's third quarter of 2024 sales reached CNY2.04 billion (US$282.47 million), increasing 42.83% year over year. Net income attributable to the parent company reached CNY315 million, surging 222.5% year over year. The company attributed this growth to effective inventory correction in the industrial and computing storage market segments.
According to industry sources, MCU demand in the Chinese market has strengthened in the second half of 2024. Despite the ongoing correction in the overall industrial market, GigaDevice's newly launched GD32G5 series MCUs target supply chains for DSMPS, charging piles, energy storage inverters, servers, optical communications, and other industrial applications. Volume production for the GD32G5 series is scheduled to start in December 2024.
Mixed performance across manufacturers
Fudan Micro reported third quarter of 2024 sales of CNY890 million, declining 5.55% year over year. Net income attributable to the parent reached CNY79 million, dropping 60.6% year over year. The company's product portfolio includes safety and identification chips, non-volatile memory, smart meter MCU chips, and FPGA.
Fudan acknowledged intense competition across all four of its product lines. The company has adjusted prices for some safety, identification chips, and memory products due to slow recovery in the consumer electronics market.
While Fudan's MCUs primarily serve smart meter applications, the company has increased its general-purpose MCU sales to 30% in 2024, actively expanding into household appliance and automotive markets. The company noted that gross profit margins for general-purpose MCUs vary by application but have approached levels comparable to smart meter MCUs.
Espressif, specializing in Wi-Fi MCUs for Internet of Things (IoT) applications, recorded CNY540 million in the third quarter of 2024 sales, representing a 49.96% year-over-year increase. Net income attributable to the parent reached CNY99 million, soaring 340.17% year over year.
With primary revenue streams from smart household appliances and consumer electronics, Espressif projects 30-35% sales growth for the full year 2024, supported by additional orders from new customers.
Despite a varying third quarter of 2024 sales performances among major Chinese MCU vendors, there is consensus that the MCU market has shown significant improvement in the second half of 2024 compared to the first half, though recovery rates differ across market segments.
Most vendors report shortened days in inventory compared to the previous quarter. Industry sources indicate that Chinese MCU makers generally express greater optimism than their Taiwanese counterparts regarding market transparency.
Article translated by Rodney Chan
