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Semico’s Inflection Point Indicator is a model developed by Semico Research, which has a history of accurately predicting semiconductor revenue inflection points four quarters in advance. After analyzing current trends, Semico announced this model indicates the semiconductor industry is repeating the pattern from 2011-2012, albeit at a muted level. Just in the past 4-5 years, the major end markets served by the semiconductor industry–tablets, notebooks, smartphones–have matured, causing growth rates to slow. On top of that, compared to 2012, most of the world’s economies are forecast to be weaker in 2016, with the exception of India. Finally, DRAM prices are expected to be weaker this year, compared to 2012. The positive growth in 2013-2014 was primarily due to the memory shortage and the subsequent rising prices.

Average selling prices (ASPs) in January recovered on lower revenues, which were down 6% year over year. Although ASPs rose 4.0% in January, they are still historically low.

Semico president Jim Feldhan commented, “In the past 8 months, the industry has seen ASPs in the $0.41 range 5 times. One has to go back to May 2009 to find a lower price, and 2009 was not a good year!”

semi ipi

 

The IPI Report is Semico’s most popular report series that accurately predicts semiconductor revenue inflection points four quarters in advance.

The emerging market for silicon carbide (SiC) and gallium nitride (GaN) power semiconductors is forecast to pass the $1 billion mark in five years, energized by demand from hybrid and electric vehicles, power supplies and photovoltaic (PV) inverters. Worldwide revenue from sales of SiC and GaN power semiconductors is projected to rise to $3.7 billion in 2025, up from just $210 million in 2015, according to IHS Inc. (NYSE: IHS), a global source of critical information and insight. Market revenue is also expected to rise with double digit growth annually for the next decade.

SiC Schottky diodes have been on the market for more than 10 years, with SiC metal-oxide semiconductor field-effect transistors (MOSFET), junction-gate field-effect transistors (JFET) and bipolar junction transistors (BJT) appearing in recent years, according to the latest information from the latest IHS SiC & GaN Power Semiconductors Report. SiC MOSFETs are proving very popular among manufacturers, with several companies are already offering them, and more are expected to in the coming year. The introduction of 900 volt (V) SiC MOSFETs, priced to compete with silicon SuperJunction MOSFETs, as well as increased competition among suppliers, forced average prices to fall in 2015.

“Declining prices will spur faster adoption of the technology,” said Richard Eden, senior market analyst for power semiconductor discretes and modules at IHS Technology. “In contrast, GaN power transistors and GaN modules have only just recently appeared in the market. GaN is a wide bandgap material offering similar performance benefits to SiC, but with greater cost-reduction potential. This price and performance advantage is possible, because GaN power devices can be grown on silicon substrates that are larger and less expensive than SiC. Although GaN transistors are now entering the market, the development of GaN Schottky diodes has virtually stopped.”

By 2020, GaN-on-silicon (Si) devices are expected to achieve price parity with — and the same superior performance as — silicon MOSFETs and insulated-gate bipolar transistors (IGBTs). When this benchmark is reached, the GaN power market is expected to surpass $600 million in 2025. In contrast, the more established SiC power market — mainly consisting of SiC power modules — will hit $3 billion in the same time period.

By 2025, SiC MOSFETs are forecast to generate revenue exceeding $300 million, almost catching Schottky diodes to become the second best-selling SiC discrete power device type. Meanwhile, SiC JFETs and SiC BJTs are each forecast to generate much less revenue than SiC MOSFETs, despite achieving good reliability, price and performance. “While end users now strongly prefer normally-off SiC MOSFETs, so SiC JFETs and BJTs look likely to remain specialized, niche products,” Eden said; “however, the largest revenues are expected to come from hybrid and full SiC power modules.”

Hybrid SiC power modules, combining Si IGBTs and SIC diodes, are estimated to have generated approximately $38 million in sales in 2015 and full SiC power modules are only two or three years behind in the ramp-up cycle. Each module type is forecast to achieve over $1 billion in revenue by 2025.

The IHS SiC & GaN Power Semiconductors Report is based on more than 50 semiconductor supply chain and potential end-user interviews. It provides detailed global analysis of this fast-moving market and explains growth drivers and likely adoption rates in major application sectors.

IC Insights recently released its new Global Wafer Capacity 2016-2020 report that provides in-depth detail, analyses, and forecasts for IC industry capacity by wafer size, by process geometry, by region, and by product type through 2020.  Figure 1 breaks down the world’s installed monthly wafer production capacity by geographic region (or country) as of December 2015.  Each regional number is the total installed monthly capacity of fabs located in that region regardless of the headquarters location for the companies that own the fabs.  For example, the wafer capacity that South Korea-based Samsung has installed in the U.S. is counted in the North America capacity total, not in the South Korea capacity total.  The ROW region consists primarily of Singapore, Israel, and Malaysia, but also includes countries/regions such as Russia, Belarus, Australia, and South America.

Figure 1

Figure 1

Some highlights of regional IC capacity by wafer size are shown below.

As of Dec-2015, Taiwan led all regions/countries in wafer capacity with nearly 22% of worldwide IC capacity installed in the country.  Taiwan surpassed South Korea in 2015 to become the largest capacity holder after having passed Japan in 2011.  China became a larger wafer capacity holder than Europe for the first time in 2010.

For wafers 150mm in diameter and smaller, Japan was the top region in terms of the amount of capacity.  The fabs running small size wafers tend to be older and typically process low-complexity, commodity type products or specialized devices.

The capacity leaders for 200mm wafers were Taiwan and Japan.  There have been many 200mm fabs closed over the past several years, but not in Taiwan and that resulted in the country becoming the largest source of 200mm capacity beginning in 2012.  With Taiwan being home to most of the IC industry’s foundry capacity, the country’s share of 200mm capacity will likely rise further in the coming years.

For 300mm wafers, South Korea was at the forefront, followed by Taiwan.  Taiwan lost its position as the leading supplier of 300mm wafer capacity in 2013.  That was in large part because ProMOS closed its large 300mm fabs, but it was also due to Samsung and SK Hynix continuing to expand their fabs in South Korea to support their high-volume DRAM and flash businesses.

Nanoelectronics research center, imec, and digital research and incubation center, iMinds, today announced that its respective board of directors have approved the intention to merge the research centers. Using the imec name, the combined entities intend to create a high-tech research center for the digital economy. The transaction is expected to be completed by the end of 2016, with the united organization staged to bring added value to existing partners while further strengthening Flanders’ authority as a technology epicenter and region focused on creating a sustainable digital future.

iMinds will be integrated as an additional business unit within imec, resulting in a new research center that will fuse the technology and systems expertise of more than 2,500 imec researchers worldwide with the digital competencies of some 1,000 iMinds researchers representing nearly 50 nationalities. The additions of iMinds’ flagship open innovation research model -ICON- (in which academic researchers and industry partners jointly develop solutions for specific market needs), iStart entrepreneurship program (supporting start-up businesses), and Living Labs will strengthen the unique capabilities and assets of imec as a research and development center.

Imec has been a global leader in the domain of nanoelectronics for more than 30 years, and has innovated applications in smart systems for the Internet of Things (IoT), Internet of Health, and Internet of Power. It has built an extensive and worldwide partner network, as well as in Flanders, and has generated successful spin-offs. iMinds’ activities span research domains such as the IoT, digital privacy and security, and the conversion of raw data into knowledge. Its software expertise is widely renowned and its entrepreneurship activities in Flanders are first-rate.

“The proliferation of the Internet of Everything has created a need for solutions that integrate both hardware and software. Such innovative products that optimally serve tomorrow’s digital economy can only be developed through intense interaction between both worlds. There are infinite opportunities in domains such as sustainable healthcare, smart cities, smart manufacturing, smart finances, smart mobility, smart grids, or in short, smart everything. Research centers such as imec, with its widely acclaimed hardware expertise, and iMinds, an expert in software and ICT applications, are uniquely positioned to bring these concepts to life,” stated Luc Van den hove, president and CEO of imec. “Furthermore, iMinds is widely recognized for its business incubation programs and open access to SMEs, and, this merger provides us with a unique opportunity to jointly reach out to the Flemish industry and further elevate Smart Flanders on the global map.”

“Flanders faces the enormous challenge of realizing a successful transition towards tomorrow’s digital society; a transition that must happen quickly, considering the urgency to reinforce Flanders’ industrial position,” commented Danny Goderis, CEO of iMinds. “The merger between imec and iMinds is Flanders’ answer to this rapidly accelerating digitization trend. We have a clear ambition to pair more than 3,500 top researchers across 70 countries with an ecosystem of Flemish companies and start-ups, thereby significantly increasing our economic and societal impact. Together, we can help Flanders boost its competitiveness and claim a strong international position.”

Now that the intention to merge has been approved, the merger protocol will be developed and the integration process of imec and iMinds will be initiated immediately. The current iMinds activities will constitute a third pillar next to imec’s units. iMinds will remain headquartered in Ghent with its researchers spread across the Flemish universities. The ambition is to operate as one organization by the end of 2016.

Flemish Minister of Innovation Philippe Muyters welcomes the fact that iMinds and imec join forces: “Thanks to their pioneering work in their respective fields, they have put themselves on the world map. When they were founded, the line between hardware and software was still very clear. Today, and especially in the future, this line is increasingly blurring – with technology, systems and applications being developed in close conjunction. The merger anticipates this trend and creates a high-tech research center for the digital economy that keeps Flanders on the world map. The gradual integration of both research centers, and the agreement to preserve their respective strengths and uniqueness, will make for a bright future.”

Engineering material magic


February 15, 2016

University of Utah engineers have discovered a new kind of 2D semiconducting material for electronics that opens the door for much speedier computers and smartphones that also consume a lot less power.

The semiconductor, made of the elements tin and oxygen, or tin monoxide (SnO), is a layer of 2D material only one atom thick, allowing electrical charges to move through it much faster than conventional 3D materials such as silicon. This material could be used in transistors, the lifeblood of all electronic devices such as computer processors and graphics processors in desktop computers and mobile devices. The material was discovered by a team led by University of Utah materials science and engineering associate professor Ashutosh Tiwari. A paper describing the research was published online Monday, Feb. 15, 2016 in the journal, Advanced Electronic Materials. The paper, which also will be the cover story on the printed version of the journal, was co-authored by University of Utah materials science and engineering doctoral students K. J. Saji and Kun Tian, and Michael Snure of the Wright-Patterson Air Force Research Lab near Dayton, Ohio.

University of Utah materials science and engineering associate professor Ashutosh Tiwari holds up a substrate layered with a newly discovered 2-D material made of tin and oxygen. Tiwari and his team have discovered this new material, tin monoxide, which allows electrical charges to move through it much faster than common 3-D material such as silicon. This breakthrough in semiconductor material could lead to much faster computers and mobile devices such as smartphones that also run on less power and with less heat. Credit: Dan Hixson/University of Utah College of Engineering

University of Utah materials science and engineering associate professor Ashutosh Tiwari holds up a substrate layered with a newly discovered 2-D material made of tin and oxygen. Tiwari and his team have discovered this new material, tin monoxide, which allows electrical charges to move through it much faster than common 3-D material such as silicon. This breakthrough in semiconductor material could lead to much faster computers and mobile devices such as smartphones that also run on less power and with less heat. Credit: Dan Hixson/University of Utah College of Engineering

Transistors and other components used in electronic devices are currently made of 3D materials such as silicon and consist of multiple layers on a glass substrate. But the downside to 3D materials is that electrons bounce around inside the layers in all directions.

The benefit of 2D materials, which is an exciting new research field that has opened up only about five years ago, is that the material is made of one layer the thickness of just one or two atoms. Consequently, the electrons “can only move in one layer so it’s much faster,” says Tiwari.

While researchers in this field have recently discovered new types of 2D material such as graphene, molybdenun disulfide and borophene, they have been materials that only allow the movement of N-type, or negative, electrons. In order to create an electronic device, however, you need semiconductor material that allows the movement of both negative electrons and positive charges known as “holes.” The tin monoxide material discovered by Tiwari and his team is the first stable P-type 2D semiconductor material ever in existence.

“Now we have everything — we have P-type 2D semiconductors and N-type 2D semiconductors,” he says. “Now things will move forward much more quickly.”

Now that Tiwari and his team have discovered this new 2D material, it can lead to the manufacturing of transistors that are even smaller and faster than those in use today. A computer processor is comprised of billions of transistors, and the more transistors packed into a single chip, the more powerful the processor can become.

Transistors made with Tiwari’s semiconducting material could lead to computers and smartphones that are more than 100 times faster than regular devices. And because the electrons move through one layer instead of bouncing around in a 3D material, there will be less friction, meaning the processors will not get as hot as normal computer chips. They also will require much less power to run, a boon for mobile electronics that have to run on battery power. Tiwari says this could be especially important for medical devices such as electronic implants that will run longer on a single battery charge.

“The field is very hot right now, and people are very interested in it,” Tiwari says. “So in two or three years we should see at least some prototype device.”

Worldwide silicon wafer area shipments increased 3 percent in 2015 when compared to 2014 area shipments according to the SEMI Silicon Manufacturers Group (SMG) in its year-end analysis of the silicon wafer industry. However, worldwide silicon revenues decreased by 6 percent in 2015 compared to 2014.

Silicon wafer area shipments in 2015 totaled 10,434 million square inches (MSI), up from the previous market high of 10,098 million square inches shipped during 2014. Revenues totaled $7.2 billion down from $7.6 billion posted in 2014. “Semiconductor silicon shipment levels remained strong throughout most of the year, resulting in record volume shipments,” said Dr. Volker Braetsch, chairman SEMI SMG and senior vice oresident of Siltronic AG. “The strength in shipments was not enough to compensate headwinds from further price decline and some exchange rate impact; silicon revenues for the year decreased yet again and are significantly below their market high set in 2007.”

Annual Silicon* Industry Trends

2007

2008

2009

2010

2011

2012

2013

2014

2015
Area Shipments (MSI)

8,661

8,137

6,707

9,370

9,043

9,031

9,067

10,098

10,434
Revenues ($B)

12.1

11.4

6.7

9.7

9.9

8.7

7.5

7.6

7.2

*Shipments are for semiconductor applications only and do not include solar applications

Silicon wafers are the fundamental building material for semiconductors, which in turn, are vital components of virtually all electronics goods, including computers, telecommunications products, and consumer electronics. The highly engineered thin round disks are produced in various diameters (from one inch to 12 inches) and serve as the substrate material on which most semiconductor devices or “chips” are fabricated.

All data cited in this release is inclusive of polished silicon wafers, including virgin test wafers and epitaxial silicon wafers, as well as non-polished silicon wafers shipped by the wafer manufacturers to the end-users.

The Silicon Manufacturers Group acts as an independent special interest group within SEMI and is open to SEMI members involved in manufacturing polycrystalline silicon, monocrystalline silicon or silicon wafers (e.g., as cut, polished, epi, etc.). The purpose of the group is to facilitate collective efforts on issues related to the silicon industry including the development of market information and statistics about the silicon industry and the semiconductor market.

By Deborah Geiger, SEMI

The application that world’s largest contract chipmaker TSMC submitted to set up a 12-inch wafer plant in China will likely be green-lighted before Chinese New Year’s rolls around on February 8, according to the China Post on January 26.

The recent Solid State Technology article  “China Semiconductor Acquisitions Surge, SEMICON China Brings the New Market into Focus“ (SEMI) on January 26 discusses semiconductor equipment spending in 2016 ─  expected to be $5.3 billion, 9 percent above 2015 spending. In 2016, total spending on semiconductor materials in China will be $6.2 billion. Programs such as “Build China’s IC Manufacturing Ecosystem” and “Tech Investment Forum-China 2016” will be offered at the upcoming SEMICON China.

The Shanghai Integrated Circuit Investment Fund (SICIF) announced a plan to invest 20 billion yuan (about $3 billion) in foundry SMIC and two other China chip manufacturers, according to Peter Clarke from the EE Times.

The Taiwan minister of economic affairs, John Deng, says Taiwan’s chip designers “are keen to accept investment from China, but the higher reaches of the semiconductor industry remain off limits.”  In the article “Minister Deng says Chip Designers Need China” by Cheng Ting-Fang and Debby Wu of the Nikkei Asian Review, Deng says that he intends to lobby the new parliament to get the ban lifted.

The article in the Economist “Chips on their Shoulders: China Wants to become a Superpower in Semiconductors” on January 23 discusses how China wants to become a superpower in semiconductors and is planning on spending “colossal sums” to achieve this.

Solid State Technology‘s Ed Korczynski writes about “Imagining China’s IC Fab Industry in 2035“ on January 22, noting that China has been investing in technology to reach global competitiveness for many decades. Intel’s Fab68 in Dalian began production of logic chips in 2010, Samsung’s Fab in Xian began production of V-NAND chips in 2014, and TSMC announced it is seeking approval to build a wholly-owned 300mm foundry in Nanjing.  How and why is the pace escalating?

The Nikkei Asian Review article on “U.S. Opposition Scuppers Philips’ $3.3B Sale of Lumileds to Chinese Buyers” by Jennifer Lo on January 22 talks about how Royal Philips had to scrap a $3.3 billion deal to sell its lighting components units to a consortium of Chinese buyers due to opposition by U.S. regulators over national security concerns.

EE Times Silicon Valley Bureau chief Rick Merritt reports from the SEMI Industry Strategy Symposium (ISS) in an article primarily on SMIC on January 20. Merritt postulates that China’s Big Fund is like the Powerball lottery, “A lot of money is at stake so everybody wants to play, but no one knows how to win.” Some say that $100 billion in government and private funds are available.

For a more comprehensive list of articles related to the China market and the semiconductor industry, visit China Market Central which helps you navigate the unfolding China market dynamics — China policy and market developments.

The popularity of Apple’s iPhone 6S and other products is boosting the microelectromechanical-systems (MEMS) microphones market to a compound annual growth rate (CAGR) of 11 percent from 2015 to 2019. The market is forecast to reach 5.8 billion units, with $1.3 billion in revenue, in 2019. Apple, which shifted from three MEMS microphones in the iPhone 6 line to four in the iPhone 6S line, will purchase more than one billion MEMS microphones in 2016 for the iPhone, according to IHS Inc. (NYSE: IHS).

“Prior to Apple, Microsoft and Motorola had already introduced some smartphones with four MEMS microphones, but in lower volumes,” said Marwan Boustany, senior analyst for MEMS and Sensors for IHS Technology. “Following Apple’s lead, additional manufacturers are expected to start including between two and four MEMS microphones in mobile handsets.”

Source: IHS

 

Apple is expected to purchase more MEMS microphones than Samsung Electronics, Xiaomi and Huawei combined in 2016. When counting the MEMS microphones used for the iPad, and for the earbuds sold with Apple’s iPhone, Apple Watch and Macbook notebooks, Apple accounted for a third of the total consumption of MEMS microphones in 2015.

The move to three or four microphones is currently driven by hands-free calling and voice commands for Siri, Google Now, Cortana and other apps, which are becoming an increasingly important means of interaction between consumers and their smartphones. Additional MEMS microphones are also added on the back of the phone for richer audio fidelity in video recording, noise cancellation and better call and recording performance.

“It will be harder for manufacturers to justify a move to five microphones in the coming years, unless clear and potentially popular use cases are identified,” Boustany said. “So far, Motorola’s Droid Turbo is the only handset with five MEMS microphones to become widely available.”

Knowles remains the market leader in MEMS microphone shipments and revenue, but the company’s share is eroding. Goertek, STMicroelectronics and AAC have recently made great gains in the market, selling to Apple and other companies, according to the IHS MEMS & Sensors for Consumer and Mobile Intelligence Service.

The Semiconductor Industry Association (SIA) today announced the global semiconductor industry posted sales totaling $335.2 billion in 2015, a slight decrease of 0.2 percent compared to the 2014 total, which was the industry’s highest-ever sales total. Global sales for the month of December 2015 reached $27.6 billion, down 4.4 percent compared to the previous month and 5.2 percent lower than sales from December 2014. Fourth quarter sales of $82.9 billion were 5.2 percent lower than the total of $87.4 billionfrom the fourth quarter of 2014. All monthly sales numbers are compiled by the World Semiconductor Trade Statistics (WSTS) organization and represent a three-month moving average.

“Despite formidable headwinds, the global semiconductor industry posted solid sales in 2015, although falling just short of the record total from 2014,” said John Neuffer, president and CEO, Semiconductor Industry Association. “Factors that limited more robust sales in 2015 include softening demand, the strength of the dollar, and normal market trends and cyclicality. In spite of these challenges, modest market growth is projected for 2016.”

Several semiconductor product segments stood out in 2015. Logic was the largest semiconductor category by sales with $90.8 billionin 2015, or 27 percent of the total semiconductor market. Memory ($77.2 billion) and micro-ICs ($61.3 billion) – a category that includes microprocessors – rounded out the top three segments in terms of total sales. Optoelectronics was the fastest growing segment, increasing 11.3 percent in 2015. Other product segments that posted increased sales in 2015 include sensors and actuators, which reached $8.8 billion in sales for a 3.7 percent annual increase, NAND flash memory ($28.8 billion/2.2 percent increase), and analog ($45.2 billion/1.9 percent increase).

Regionally, annual sales increased 7.7 percent in China, leading all regional markets. All other regional markets – the Americas (-0.8 percent), Europe (-8.5 percent), Japan (-10.7 percent), and Asia Pacific/All Other (-0.2 percent) – saw decreased sales compared to 2014.

“The semiconductor industry is critically important to the U.S. economy and our global competitiveness,” continued Neuffer. “We urge Congress to enact polices in 2016 that promote innovation and growth. One such initiative is the Trans-Pacific Partnership (TPP), a landmark agreement that would tear down myriad barriers to trade with countries in the Asia-Pacific. The TPP is good for the semiconductor industry, the tech sector, the American economy, and the global economy. Congress should approve it.”

December 2015

Billions

Month-to-Month Sales                               

Market

Last Month

Current Month

% Change

Americas

6.07

5.75

-5.2%

Europe

2.93

2.77

-5.7%

Japan

2.68

2.57

-4.1%

China

8.67

8.45

-2.5%

Asia Pacific/All Other

8.53

8.08

-5.3%

Total

28.88

27.62

-4.4%

Year-to-Year Sales                          

Market

Last Year

Current Month

% Change

Americas

6.73

5.75

-14.5%

Europe

3.01

2.77

-7.9%

Japan

2.80

2.57

-8.1%

China

8.03

8.45

5.2%

Asia Pacific/All Other

8.57

8.08

-5.7%

Total

29.13

27.62

-5.2%

Three-Month-Moving Average Sales

Market

Jul/Aug/Sep

Oct/Nov/Dec

% Change

Americas

5.82

5.75

-1.2%

Europe

2.87

2.77

-3.6%

Japan

2.69

2.57

-4.3%

China

8.45

8.45

0.0%

Asia Pacific/All Other

8.58

8.08

-5.8%

Total

28.41

27.62

-2.8%

The demand for sensor hubs, dedicated processing elements used for low-power sensor processing tasks, is booming. In fact due to “always on” sensor processing trends and the limitations of battery technology, the overall market for all types of sensor hubs will exceed 1.0 billion units in 2015, rising to nearly 2.0 billion in 2018, according to IHS Inc. (NYSE: IHS), a global source of critical information and insight. Samsung, Apple and Motorola have already been using sensor hubs in their smartphones for a number of years, and Apple, Motorola and Microsoft explicitly advertise their use of sensor hubs or sensor cores in certain smartphones.

“The sensor hub market is incredibly dynamic, changing rapidly over the last two years, due in large part to Apple’s iPhones,” said Marwan Boustany, senior analyst for IHS Technology. “When Apple shifted from a discrete microcontroller to an integrated application-processor-based solution for the iPhone 6S line in 2015, it signaled to other manufacturers that this approach had reached maturity.”

Sensor_Hub_Forecast

According to the IHS MEMS & Sensors for Consumer and Mobile Intelligence Service, sensor hubs for high-end smartphones are changing rapidly from discrete microcontrollers (MCUs) used in the iPhone 6, Samsung Galaxy S6, and other high-end smartphones, to sensor hubs that are integrated into the application processor (AP), as in the iPhone 6S and Huawei Mate S.

“AP-sensor hubs will increasingly dominate the midrange to high-end smartphone segments in the next few years,” Boustany said. “Samsung is also testing alternative approaches to sensor hubs using a Global-Navigation-Satellite-System-integrated sensor hub from Broadcom in its Note 4 and S6 smartphones. We also expect to see sensor hubs that are integrated in the sensor package to make inroads in smartphones, especially in the midrange and low-end segments.”

As the use of AP sensor hubs rises, market share for MCU and other discrete sensor hubs will decline; however, because wearable devices require long battery life in a small package, they will continue to rely on discrete MCUs and field-programmable gate arrays (FPGAs). With increasing numbers of smart watches entering the market, Qualcomm’s Snapdragon 400 and other AP sensor hubs have also begun to penetrate the wearable-device market.

“Apple has chosen to use a discrete MCU in the first-generation Apple Watch, but the company may follow its handset strategy and integrate the sensor hub into its custom application processor in later generations,” Boustany said. “Smartwatches will likely follow trends seen in the smartphone segment, but with a higher penetration of MCUs than smartphones, due to tighter power-saving requirements.”