Embedded processor market tops 10 billion units in 2008

NATICK, Mass., 20 Feb. 2009. Embedded processor unit shipments were worth more than 10 billion in 2008, say analysts from VDC Research Group in Natick, Mass. Embedded processor categories included in VDC's Embedded Systems Practice market forecast included embedded CPUs, DSPs, FPGAs, and MCUs.

Feb 20th, 2009

NATICK, Mass., 20 Feb. 2009.Embedded processor unit shipments were worth more than 10 billion in 2008, say analysts from VDC Research Group in Natick, Mass. Embedded processor categories included in VDC's Embedded Systems Practice market forecast included embedded CPUs, DSPs, FPGAs, and MCUs.

Most of the 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, VDC analysts say.

The embedded processors market has been one of high growth in 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 several powerful trends, beginning with:

-- rapid penetration of processors into 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 diversified – by application, account type and technical solution – many markets are comprised of mission-critical applications.

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, VDC analysts say.

For more information contact VDC Research Group online at www.vdcresearch.com.

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