Microcontroller Industry ESG Thematic Report, 2023

ESG (Environmental, Social and Governance) in Microcontroller Industry

Integrating Environmental, Social, and Governance (ESG) within the investment and decision-making processes points to responsible investing. Investment into ESG has been booming since 2013; equally, Micro Controller Industry, have various agenda in achieving certain ESG goals around the world which has witnessed a large infusion of investment capital since 2020.

Micro controllers are used in plethora of applications ranging from automotive, industrial, telecommunication, health care and consumer electronics. Electric Vehicle is booming in current market space as a result microcontrollers sector have been impacted is proportionately. As number of peers have been increased, material sourcing for manufacturing microcontroller has increased. From a customer’s point of view better quality at affordable rate is important as there has been a declining selling price.  

ESG Trends

Micro Controller market theme have both environmental and social impact throughout the applications which have been mentioned earlier. Firstly, material sourcing for this sector has been a crucial factor, materials used like tin, tungsten, tantalum, gold, silver, cobalt etc. which are very expensive and there are high discrepancies and conflicts rising from local communities, vendors, and suppliers alike. The companies that are on focus are required to have responsible mineral sourcing policies with legal binding or acts which has been mentioned in supplier code of conduct which impacts the social aspect of ESG significantly.  

Secondly, there is a strong focus on health and safety of employees in manufacturing of microcontrollers with a question on whether the companies operating in this sector are ISO 45001 or OSHAS 18001 certified. There is long term health impact for workers due to the mining of these materials which are mostly carcinogenic. The companies in this sector aim to keep fatality rates low with sound health and safety policies throughout the production and supply chain. Finally, human right issues have been rising due to various factors like no work life balance, flexible working hours, hectic time schedule with very high productivity alongside mining. All these have a significant impact on United Nations’ Sustainable Development Goal 8 (SDG 8) which calls for decent work and economic growth.

ESG Challenges

Main challenges that Microcontroller industry are facing is lying with rising conflicts among supply chain, local communities, and vendors alike. As peers in market increase, demand for materials at a cheaper rate is a big factor as materials used in microcontrollers are very much expensive. Work life balance is crucial area of improvement which is required with a proper job rotation, work life balance policies, and rest breaks. Moreover, health and safety are also prime concern especially long-term effect rising from raw materials or products have been still prevailing even with sound HSE policy and certifications. Workplace related diseases like, tungsten poisoning, lead poisoning, cadmium poisoning etc. are few prevailing diseases. Providing necessary protective gears, better work life balance, provision of regular medical surveillance and awareness classes can reduce such impact to the workforce    

Growth of the Microcontroller Market

The microcontroller market size has been valued at USD 18.5 billion in 2021 globally and is expected to expand at a compound annual growth rate (CAGR) of 9.8% from 2022 to 2030. Globally, more than 29 billion units of microcontrollers were transported in 2021. Microcontrollers are majorly used in devices that require a considerable degree of control utilized by the end users. The increasing competition in the industry has led to the low price of the product, which will drive the demand for microcontrollers. The growing awareness regarding smart energy management with the emergence of smart grids is expected to increase the MCU demand. The COVID-19 pandemic has had a substantial impact on the semiconductor manufacturing industries across the globe.

Key Companies in this theme

    • Infineon Technologies AG

    • Microchip Technology Inc.

    • NXP Semiconductor

    • Renesas Electronics Corporation

    • STMicroelectronics

    • Texas Instruments Incorporated.

Scope of the Microcontroller Industry ESG Thematic Report:

    • Macro-economic and ESG-variable analysis of the industry, including regulatory, policy, and innovation landscape

    • Key insights on infrastructure developments and ESG issues affecting the theme

    • Identify key initiatives and challenges within the industry

    • Identify ESG leaders within the industry

    • Understand key initiatives and the impact of companies within the sector to fuel an informed decision-making process

    • Analysis of industry activities based on multi-media sources, including significant controversies and market sentiment

Key Benefits of the Microcontroller Industry ESG Thematic Report:

    • Developing a comprehensive understanding of macro-economic, Policies & Regulations and innovations affecting the Micro Controller space, globally

    • Key insights into environmental developments and ESG issues affecting the theme

    • Identifying ESG risks and opportunities to business among leading players in the Micro Controller space

    • Obtaining a clear and relevant understanding of company actions, progress, and impact and find opportunities for investment into the sector