The market is expected to exceed $7 billion. Four technologies are disrupting the IoT MCU market.

MCU (Microcontroller Unit) is the "invisible backbone" of modern electronic devices. Today, billions of devices rely on MCUs to achieve control, sensing, and communication functions, and are widely distributed across various industries. By integrating a processor, memory, and input/output peripherals on a single low-power chip, MCUs can be applied in a wide range of scenarios, from household appliances and wearable devices to automobiles and industrial machinery.

The IoT MCU is the "brain" of connected devices. Different from traditional MCUs, IoT MCUs are specifically designed for connected devices, usually combining processing and control capabilities while integrating or supporting communication interfaces. As the deployment of the Internet of Things expands, these connected MCUs are becoming a key driving force for low-power, always-on applications such as smart meters, industrial sensors, and connected cars.

According to the "IoT MCU Market Report 2025–2030" released by IoT Analytics in October 2025, global MCU spending reached $23.2 billion in 2024. This market includes both Internet of Things (IoT) and non-IoT MCUs and is expected to grow at a compound annual growth rate (CAGR) of 3.9% by 2030, reaching $29.4 billion. This growth is against the backdrop of the rapid expansion of global connectivity technologies - by 2030, the number of globally connected IoT devices is expected to exceed 40 billion.

For IoT MCU suppliers, the market is recovering, and technology is constantly evolving. This means that suppliers must stay informed about the latest trends to remain competitive in a highly concentrated market. For OEMs/end-users using IoT MCUs, as IoT MCUs become more open, energy-efficient, intelligent, and secure, keeping up with technological trends and key suppliers can be very valuable. Against this background, this article will outline the recent situation and future technological trends of the IoT MCU market based on the latest report from IoT Analytics.

Key Drivers of IoT MCU Growth

The difference between IoT MCUs and traditional MCUs is not just the addition of a "Wi-Fi" or "BLE" module but a comprehensive upgrade in concept and ecosystem.

Table: Comparison between Traditional MCUs and IoT MCUs

The global MCU market is expected to reach nearly $30 billion by 2030. The IoT MCU segment is also thriving. According to the report, the global IoT MCU market reached $5.1 billion in 2024, a 9% decline from 2023. This decline was mainly due to the digestion of overall supply chain inventory. However, market analysis in the first half of 2025 showed a clear recovery. As demand recovered and delivery cycles and prices stabilized, IoT MCU revenues increased by 1.8% year-on-year. The report predicts that the IoT MCU market will maintain steady growth in the future, with a compound annual growth rate (CAGR) of approximately 6.3% by 2030, reaching an estimated $7.32 billion.

The key factors driving the growth of IoT MCUs are as follows:

① Release of Potential Demand for Automation Upgrades

In 2023 and 2024, the growth of the industrial IoT market slowed to its lowest level since IoT Analytics began researching the IoT market in 2014. The hardware sector (including the automation and semiconductor segments) was the most affected, and many enterprises postponed hardware upgrades. However, according to the "Global IoT Enterprise Spending (Q1 2025 Update)" by IoT Analytics, 2025 will see accelerated growth. Enterprises are expected to release the postponed demand for automation upgrades, which largely depend on MCU-based PLCs, IPCs, and gateway devices, thus driving the growth of the IoT MCU market.

② LPWAN Projects Boost Demand for IoT MCUs

According to the "Global Low-Power Wide-Area Network (LPWAN) Tracking and Forecast Report 2015–2027" by IoT Analytics, there are nearly 1.3 billion LPWAN IoT connections globally, accounting for approximately 8% of all connected IoT devices in 2023. The report predicts that by 2027, the number of LPWAN connections will grow at a compound annual growth rate of 26%, reaching 3 billion, accounting for 10% of all global IoT connections.

Thanks to the deployment of NB-IoT and LoRaWAN, LPWAN chipset shipments are expected to grow by 8% year-on-year in 2025. Transportation, smart cities, and building and infrastructure are the fastest-growing segments, with smart meters contributing the largest volume. India plans to install 250 million smart meters by 2027, and European countries are also promoting related plans. These government-led smart meter projects are driving large-scale deployments.

Each LPWAN device requires an MCU as the main controller of the communication module, ensuring continuous demand.

③ MCUs Play a Core Role as AI Moves to the Edge

In previous articles by the IoT Think Tank, the trend of edge AI/end-side AI has been emphasized - edge AI refers to performing AI processing on the device side (such as smartphones, smart home devices, and wearable devices) rather than relying entirely on cloud servers. This shift brings three core advantages: First, by processing data locally, edge AI significantly reduces the latency of data transmission to the cloud, thereby improving response speed; second, sensitive data does not need to be uploaded to the cloud, reducing the risk of data leakage and enhancing privacy protection; finally, local computing reduces the energy consumption of cloud data transmission, improving energy efficiency.

Especially with the surge in generative AI applications, the power consumption of data centers has also increased. The power consumption of using generative AI for search inference is ten times that of traditional web searches. To address this issue, in addition to deploying energy-efficient chips in data centers, transferring AI workloads to edge computing devices is also an effective strategy. Adopting a hybrid AI architecture can flexibly combine the advantages of cloud and edge computing. Edge-side terminal devices, such as smartphones, PCs, and vehicles, are fully capable of using smaller models to handle corresponding workloads without relying on cloud resources.

In this context, IoT Analytics believes that edge AI is the potential next major trend in industrial AI. The maturity of dedicated edge computing hardware (such as MCUs) makes edge AI an achievable goal for manufacturers. The integration of AI and MCUs enables always-on inference at the edge.

④ Asia, Especially China, Becomes the Center of Market Growth

The geographical center of gravity of the IoT MCU market is steadily shifting towards Asia. Data shows that all regions experienced market contractions in 2024, while Asia will achieve the most significant recovery in 2025. China is the main driving force behind this growth.

Behind the growth of the Chinese market is the recent large-scale investment in energy infrastructure projects, where IoT MCUs will play a key role. For example, in January 2025, the State Grid of China announced a record investment of $88 billion to optimize the power grid and strengthen distribution infrastructure. Looking ahead, the Chinese market is expected to maintain the fastest growth momentum until 2030.

Four Technologies Transforming the IoT MCU Market

Technological Change 1: The Rise and Popularity of the RISC-V Architecture

The Sino-US technological friction has elevated the RISC-V Instruction Set Architecture (ISA) from a technological option to a strategic necessity. In March this year, two people familiar with the matter revealed that China plans to issue policy guidance for the first time to encourage the nationwide use of open-source RISC-V chips to accelerate the reduction of China's dependence on Western technologies. The sources said that the policy was jointly drafted by eight departments, including the Cyberspace Administration of China, the Ministry of Industry and Information Technology, the Ministry of Science and Technology, and the National Intellectual Property Administration.

If the policy is officially released, it will become the world's first national policy explicitly requiring large-scale adoption of RISC-V, establishing it as a national strategic priority. When a large market like China promotes RISC-V at the national level, it will surely expand its global ecosystem, promote the maturity of software and development tools, and accelerate the cross-border flow of capital and technology.

Even in countries and regions without mandatory policies, more and more manufacturers are actively adopting RISC-V, seeing it as a flexible, cost-effective, and energy-efficient alternative architecture. Different from proprietary architectures such as ARM, which require licensing of prefabricated cores, RISC-V adopts an open, royalty-free model, allowing enterprises to design and customize processor cores for specific tasks without paying licensing fees, thereby reducing dependence on a few dominant suppliers and gaining greater design freedom.

The automotive industry has become a key battleground for MCU innovation. With its flexible and customizable features, RISC-V is accelerating the transformation of automobiles towards software-defined vehicles (SDVs) and intelligent mobility. It is particularly suitable for developing customized processors for critical in-vehicle systems (such as safety, communication, and AI-driven functions).

Recent typical cases based on RISC-V include:

• Renesas Electronics: In March 2024, Japanese semiconductor manufacturer Renesas launched the R9A02G series of 32-bit MCUs based on its self-developed RISC-V core, targeting diverse IoT, industrial, and consumer applications.
• Microchip Technology: In July 2024, US semiconductor manufacturer Microchip Technology released the PIC64GX RISC-V MCU series, featuring a 64-bit RISC-V subsystem to improve energy efficiency and security and reduce the risk of side-channel attacks.
• Infineon: In November 2024, German semiconductor manufacturer Infineon introduced a RISC-V-based option in its AURIX TC4x series, supporting the construction of scalable and secure SDV platforms.
• Ecarx: In May 2025, Chinese automotive intelligent solution provider Ecarx released the EXP01 processor based on the RISC-V architecture. This chip has passed the highest level of automotive functional safety certification (ASIL-D).

Technological Change 2: Energy Efficiency Becomes a Core Design Principle

Currently, MCU design focuses heavily on ultra-low power consumption to support long-life IoT deployments powered by batteries. As IoT deployments expand into power-constrained environments, MCU suppliers are integrating advanced power management functions, such as deep sleep modes and adaptive voltage control, to significantly reduce energy consumption. This focus on energy efficiency directly translates into lower operating costs and supports new business models based on "deploy-and-forget" devices with battery lives of several years.

Typical examples of energy-efficient MCUs include:

• STMicroelectronics: In November 2024, Swiss semiconductor manufacturer STMicroelectronics launched the STM32WL33, an ultra-low-power wireless system-on-chip (SoC) targeting smart meters, smart buildings, and industrial IoT applications. The chip's current consumption can be as low as 4.2 µA in wideband reception mode, and its battery life can be extended to 15 years when paired with certain optimized sensors.
• NXP: In January 2025, Dutch semiconductor manufacturer NXP released the MCX L series of next-generation ultra-low-power microcontrollers, based on a 40-nanometer ULP process and featuring Adaptive Dynamic Voltage Control (ADVC). By dynamically adjusting the core voltage, the MCX L series is said to achieve high energy efficiency, with power consumption reduced by up to 50%.

Technological Change 3: Edge AI Capabilities are Directly Integrated into MCUs

Advanced artificial intelligence (AI) and machine learning (ML) functions are moving from the cloud to the chip, enabling devices to perform intelligent inference in real-time. The integration of edge AI is transforming MCUs into intelligent decision-making centers. This transformation allows manufacturers to provide more value by moving the software stack up and generate revenue from AI-driven applications while achieving the advantages of reduced latency, enhanced data privacy, and reduced reliance on cloud infrastructure.

Typical examples of edge AI on MCUs include:

• STMicroelectronics: In December 2024, STMicroelectronics launched the STM32N6 series of microcontrollers, equipped with a Neural-ART accelerator, which is said to significantly improve machine learning performance.
• Infineon: In April 2024, Infineon launched the PSOC Edge series of E81, E83, and E84 microcontrollers, aiming to enhance the intelligence of IoT, consumer, and industrial applications through enhanced machine learning capabilities.

Technological Change 4: Secure MCUs and Hardware Roots of Trust are Becoming Essential in IoT Devices

The chart shows how hardware security elements help implement the hardware root of trust and its 15 key functions

As the scale of IoT deployments expands, devices must protect sensitive data, prevent cloning, and ensure data integrity from the chip to the cloud. This has driven the widespread use of secure MCUs and dedicated hardware security modules (such as Secure Elements (SE) or Trusted Platform Modules (TPM)) to establish a Hardware Root of Trust (HRoT).

Secure MCUs integrate functions such as secure boot, device authentication, encrypted data storage, and attestation directly into the microcontroller, creating a trusted execution environment isolated from normal operations; SEs and TPMs provide similar protection as independent "vaults" - together, they lay the foundation for device trustworthiness, enabling secure firmware updates, user privacy protection, and defense against malware and software-layer attacks.

As IoT manufacturers recognize that hardware security is no longer an option but a fundamental requirement, the adoption of secure MCUs and HRoT solutions is accelerating.

Typical examples of integrated hardware security include:

• NXP: In January 2025, NXP announced that its MCX L series will integrate NXP's EdgeLock secure element.
• Infineon: In November 2024, the first member of the Infineon AURIX TC4x series, the TC4Dx, met the latest ISO/SAE 21434 cybersecurity standards, including support for post-quantum cryptography.

In Conclusion

The evolution of IoT MCUs is a microcosm of the "Internetization" of embedded systems - it integrates the control logic of traditional MCUs, the networking capabilities of communication modules, and the trust system of security chips into a compact and powerful system unit, enabling each "micro-terminal" to become a node in the intelligent world.

In the future, with the further integration of AI, edge computing, and low-power networks, IoT MCUs will no longer be just "control chips" but the fundamental computing units that support human-machine interconnection and industrial digitalization. Just as microprocessors drove the rise of the information society in the past two decades, IoT MCUs will become the underlying engine in the era of the Internet of Everything in the next decade.

This article is from the WeChat official account "IoT Think