NATICK, USA: Embedded processor unit shipments were over 10 billion in the year ended 2008, according to recently released research from VDC's Embedded Systems Practice. Embedded processor categories included in this market forecast included embedded CPUs, DSPs, FPGAs, and MCUs.

It is likely to grow from 10.12 billion units in 2008 to 13.79 billion units in 2013. The 2008-2013 CAGR is likely to be 6.38 percent.

Total Market, Processors in Embedded Applications,
Modeled Unit Shipments, 2008-2013 (Units in Billions)


The vast majority of this embedded processor market remains microcontrollers, which are low-cost autonomous embedded processing units used in embedded applications that have lower-end processing requirements. Embedded CPUs, DSPs, and FPGAs all typically provide higher levels of processing performance than MCUs and command much higher average selling prices (ASPs), but exist in far smaller unit quantities, making MCUs also the largest dollar volume segment of the four embedded processing technologies.

The embedded processors market has been one of very high growth in recent years. Embedded processing functionality has created intelligent and smart products and equipment throughout many industries, causing growth rates that have been well into the double digits as embedded computing has proliferated.

Off-the-shelf processor architectures in the form of CPUs, DSPs, FPGAs, and MCUs have especially benefited from a number of powerful trends, beginning with the following:

• Rapid penetration of processors into new product applications;
• Custom ASIC replacement with standard, merchant-sourced embedded processor platforms; and
• Acute pressures to reduce TCD, TCO and time-to-market further upstream.

The current global recession is creating an extremely challenging environment for the entire semiconductor industry and the embedded processor segment will not be immune to negative effects from the current downturn, but it offers elements that are somewhat shielded compared to other semiconductor segments:

• Certain embedded markets are far enough removed from consumers to gain some protection from the tapped out consumer market;
• These markets are also highly diversified; by application, account type and technical solution; many markets are comprised of mission-critical applications; and
• The embedded processors market is driven by ROI regardless of macroeconomic conditions.

As a result of the downturn, both dollar volume and unit volume growth rates will be impacted, however dollar volume growth will be more adversely affected than will unit volume growth as a result of falling ASPs due to pricing pressure from embedded OEMs competing in a challenging economic environment.