Global Automotive Semiconductor Market Overview
The global Automotive Semiconductor market was valued at USD 51 BN in 2019 and is estimated to reach over USD 68 BN by 2026 with a CAGR of 8.8% between 2020 and 2026. The market growth is directly proportional to the growth of the automotive industry. Factors such as rising vehicle production resulted in a rise in demand for automotive semiconductors. The upsurging trend of vehicle electrification and increasing demand for advanced safety, convenience, and comfort systems are the other factors driving the growth of the automotive semiconductor market. Rising demand for automotive infotainment systems is likely to drive the demand of the market during the forecast period.
The market is mainly driven by focusing on adopting eco-friendly alternative fuel vehicles such as hybrid electric automobiles. For instance, the Ford Focus Electric is made up of recycled materials, and the padding is made out of bio-based materials. Global electric vehicle sales for quarter one in 2016 were 180,500 units, a 42 percent increase from 2015. China is the world's leading manufacturing country for an electric vehicle. Car companies in China are doubling down on product plans to produce electric vehicles. In 2017, GAC Group from China had started a new factory to manufacture electric cars and autonomous vehicles. It will have a capacity of 200,000 cars a year once completed by the end of next year. The rise in electric car sales is attributed to a growth in the Chinese market, followed by sales in Europe and the United States. Growing electric car sales will spur the demand for the power semiconductor market within the forecast period. Robust improvement in chassis and safety features and powertrain and convenience facilitates are expected to drive the market. In addition to this, rising focuses on green technology, strict policies on safety in cars such as airbags and communication systems are anticipated to drive the market.
Increasing income and improving lifestyles across the world and especially in developing countries resulted in the growing demand for passenger vehicles and automotive semiconductors. The demand for analog IC's is fueled by strong growth in driverless and smart cars. Driverless and smart cars demand the most advanced car body electronics system, sophisticated navigation, efficient controls, enhanced safety features, etc. Semiconductors are essential parts of all these systems. With an increasing demand for these features worldwide, the demand for automotive semiconductors is foreseen to grow at a rapid pace. However, the high initial investment cost to acquire sophisticated systems in the automobile, high component replacement costs, and commercial and passenger vehicles sales have been declining across the world are predicted as notable restraints to impede the market over the upcoming years. The market is moderately concentrated market with consist of few Key players such as NXP Semiconductors N.V (The Netherlands), Renesas Electronics Corp. (Japan), Infineon Technologies AG (Germany), STMicroelectronics N.V. (Switzerland), Robert Bosch GmbH (Germany), Texas Instruments, Inc. (U.S.), ON Semiconductor Corp. (U.S.), ROHM Co., Ltd. (Japan), Toshiba Corp. (Japan), and Analog Devices Inc. (U.S.) among others.
In this market research report, the market is segmented by component, vehicle type, fuel type, application and region.
Analysis by Component
Based on component, the market is segmented into Processor, Analog IC, Discrete Power Device, Sensor, Memory Device, Lighting Device and Others. The processor segment held the largest share in the global automotive semiconductor market. Automotive processors include components like microprocessor units (MPUS), microcontroller units (MCUS), digital signal processors (DSPS), and graphic processing units (GPUS). Processors offer a ready source of power, ventilation, and mounting spaces in terrific quantities. Processors are now squeezed into many locations, including the side- and rear-view mirrors, headliner, bumpers, gas tank, seat cushions, wheel rims, headrests, and many other crevices of automotive. The installation of multi-core processors into a modern car is driving the evolution of the processor segment. The automobile's processor content is expanding dramatically, driven by several concurrent forces, including consumer demand for entertainment systems and convenience functions, government emission control regulations, and the addition of enhanced safety features.
Analysis by Vehicle Type
Based on vehicle type, the market has been segmented into Passenger Car, Light Commercial Vehicle (LCV), and Heavy Commercial Vehicle. In 2019, the passenger car segment dominated the global automotive semiconductor market by vehicle type. Passenger car is the most lucrative segment among the vehicle type. Passenger car is projected to grow due to disposable income in rural and urban sectors with easy finance availability. Safety and comfort have now become the first requirement of the purchaser. Companies operating within this segment are focused on safety and driving amenities to grab share and sustain brand name in the market. Carmakers have ramped up plans to install advanced dashboard displays, electric batteries, wireless communications, and autonomous driving systems in their latest vehicle models. The value of semiconductors embedded inside passenger cars will increase with increasing number of microcontrollers, memory chips, sensors, and power management components used for navigation, collision avoidance, backup cameras, and other systems.
Analysis by Fuel Type
Based on fuel type, the market has been segmented into Gasoline, Diesel, Electric/Hybrid Electric Vehicle (EV/HEV). In 2019, the gasoline segment dominated the global automotive semiconductor market. Gasoline will remain the dominant segment owing to the spurring passenger car sales. Consumer highly prefers buying gasoline driven vehicle due to price concession and abundant availability of fuel station. Further, Electric/Hybrid Electric Vehicle (EV/HEV) is the fastest growing segment during the forecast period. The increasing demand for EVs is attributed to such vehicles' benefits, including no emission, lower maintenance cost, no noise, higher efficiency, and reduced vibrations.
Analysis by Application
Based on application, the market has been segmented into Safety, Powertrain, Body Electronics, Chassis and Others. Body Electronics is dominating the segment followed by powertrain. The body electronics application segment held the largest share in the global automotive semiconductor market. Body electronics allow vehicle occupants to feel comfortable inside the vehicle and will enable them to adjust various settings conveniently. Body electronics of automobiles include body control modules, seta, doors, mirror & windows control, and HVAC systems. The segment is projected to see positive growth as a car body, and convenience modules are becoming more complex. They are used in a more significant number to improve the comfort and safety of drivers and passengers. Another significant trend that is expanding segment growth is features designed to make occupants inside the vehicle more comfortable.
Analysis by Region
Region wise, the market has been segmented into North America, Europe, Asia Pacific, Latin America and Middle East and Africa. The Asia Pacific ranks highest in terms of revenue and will remain dominant during the forecast period. Asia Pacific market has evolved into the largest market of vehicles and, consequently, the largest automotive semiconductor consumer worldwide. The region will post the fastest growth and will remain the largest due to its large consumer base. Overall, some best growth rates are witnessed in China, Japan, India, and South Korea. With trends in performance, safety, comfort, convenience, and entertainment, the automotive semiconductor will continue to swell.
The European automotive semiconductor market is the second-largest and second-fastest growing region in the global market. Europe is a hub of automotive manufacturing. The region is home to many top players like Infineon Technologies AG and Robert Bosch AG, Toshiba Corporation. Germany, U.K, France, Spain, and Italy are significant contributors to the market. In 2019, Germany accounted for the highest revenue share of the European automotive semiconductor market.
North America is the third-largest market for automotive semiconductors, mainly driven by the United States. The US and Canadian governments have taken several initiatives to improve the automotive manufacturing industry. The autonomous vehicle segment is one of the topmost demanded segments and thus will remain the main target of the market participants. The recent adoption of various IoT-enabled devices to gain better connectivity in the US is remarkably contributing to the market's evolution.
Market Segmentation covered in the Report:
By Component:
- Processors
- Analog ICS
- Discrete Power Devices
- Sensors
- Memory Devices
- Lighting Devices
By Vehicle Type:
- Passenger Cars
- Light Commercial Vehicles
- Heavy Commercial Vehicles
By Fuel Type:
- Gasoline
- Diesel
- Electric and Hybrid
- Hybrid Electric Vehicles (HEVS)
- Plug-In Hybrid Electric Vehicles (PHEVS)
- Battery Electric Vehicles (BEVS)
By Applications:
- Powertrain (Engine Control, Hev/Ev Motor, and Transmission)
- Safety (Air Bags, Electronic Stability Control, Adaptive Cruise Control, Night Vision, TPMS, and Parking Assistance)
- Body Electronics (Body Control Modules, Seta, Doors, Mirror & Windows Control, and HVAC Systems)
- Chassis (Brakes, Steering, Suspension, Traction Control, and Vehicle Dynamics Management)
- Telematics and Infotainment (Dashboards, Navigation, Connectivity Devices, and Audio-Video Systems)
By Region:
- North America
- Europe
- Asia Pacific
- Latin America
- Middle East and Africa
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