Automotive Semiconductor Market

Automotive Semiconductor Market Size

Automotive Semiconductor Market is anticipated to exhibit a Compound Annual Growth Rate (CAGR) of 10.2% during the forecast span from 2024 to 2034. In 2023, the market size was assessed at USD 61.4 billion and is projected to reach USD 179 billion by the completion of 2034.

Automotive semiconductor is an essential component in contemporary vehicles, which serves as the central processing unit for electronic systems installed within vehicles. These semiconductors are often integrated into microcontrollers and have a significance in providing functionalities such as engine control, safety features, and infotainment. Additionally, they act as a neurological hub, which is used to process data and enable seamless connection between various vehicle components. This electronic intelligence is important for driving modern automotive innovations, thereby enabling technologies that improve vehicle performance, efficiency, and its safety. Moreover, the need for complex automotive semiconductors is rising with the developing technology, which is encouraging the production of connected and smart automobiles. Therefore, these semiconductors serve as a major catalyst, which is used to power the sophisticated electronic ecosystems of automobiles and improves the driving experience.

Market Highlights

Automotive Semiconductor Market is expected to grow at a compound annual growth rate (CAGR) of 10.2% from 2024 to 2034

Automotive Semiconductor Market is projected to reach USD 179 billion over the forecast period, owing to the growing integration of advanced electronics in vehicles. The surge in demand for semiconductors within the automotive sector is attributed to the rising adoption of electric vehicles and autonomous driving technologies. Moreover, continuous developments in safety systems, infotainment, and vehicle efficiency contribute to the expanding market ecosystem. This shift towards smart and connected vehicles intensifies the requirement for advanced semiconductors, which further drives innovation in the industry. Additionally, the global automotive semiconductor market experience intense competition among major players that are striving to address the demands of automakers. Furthermore, the advent of modern technologies such as artificial intelligence, machine learning, and 5G connectivity further pushes the growth of the market. Therefore, with a focus on improving performance, along with safety and driving experiences, the automotive semiconductor market will witness continuous growth and technological developments.

Source: Fatpos Global

Automotive Semiconductor Market Segmentation

Analog integrated circuits will lead due to their vital role in managing complicated electronic systems

Based on component , the automotive semiconductor market is segmented into processor, analog IC, discrete power device, sensor, and others. The Analog IC (Integrated Circuit) segment will maintain the market dominance owing to its essential role in managing the complicated electronic systems within contemporary vehicles. With electronics emerging as a major selling point among automakers, modern vehicles contain multiple sensors, electronic control units (ECUs), wire harnesses, and complex network systems. Thus, analog integrated circuits play a significant role in supporting CPUs and sensors, allowing smooth communication among the various electronic components in a vehicle. Additionally, the growing electrification of the powertrain segment fuels the demand for power devices and presents an opportunity for substantial growth in analog ICs segment. Consequently, as automotive electronics continue to develop, the analog IC segment is expected to endure its dominance, due to its indispensable role in ensuring efficient and interconnected operation of various vehicle systems.

Telematics and Infotainment segment will dominate due to the increased need for automotive semiconductors to create car electronics

By application, automotive semiconductor market is divided into powertrain, safety, chassis, telematics & infotainment, and others. Telematics and Infotainment segment will likely dominate the market due to the constant evolution of cell phone technology, internet connectivity, and GPS receivers. The increasing need for precision-based features like location tracking, job dispatch, and vehicle diagnostics drives the demand for telematics and infotainment systems. Additionally, these systems showcase flexible capabilities, which seamlessly integrate with GPS and entertainment systems in modern vehicles. This integrated network can support user peripherals such as short-range wireless devices, mobile phones, and USB devices.  Therefore, with rising consumer expectations for better connection and entertainment options, the dominance of telematics and infotainment segment is projected to be fueled by technology advancements and the incorporation of advanced features into car electronics.

Source: Fatpos Global

Market Dynamics

Growth Drivers

Rising Popularity of Electric Vehicles (EVs) Generates Growth Opportunities

Rising focus on sustainable mobility has become a significant force behind the growing demand for electric vehicles (EVs), which simultaneously encourage the requirement for automotive semiconductor. Governments across the world are advocating for strict emission standards, and consumers are increasingly choosing environmentally friendly transportation options, which contributes to a major shift toward vehicle electrification. Electric vehicles rely on advanced semiconductor technologies for effective power management, battery control, and complex connectivity solutions. This upsurge in demand for EVs, along with technological progress in the electric vehicle sector, presents a significant market opportunity for semiconductor manufacturers. Therefore , automotive semiconductors are poised to address the requirements of this expanding industry and aligns with the global commitment towards sustainable and eco-friendly transportation solutions.

Innovations in Self-Driving Technologies will Result in Market Expansion

Improvements in autonomous driving technology is a fundamental growth factor for the automotive semiconductor market. The evolution and integration of autonomous vehicles requires innovative semiconductor technologies to power complex systems such as advanced driver assistance systems (ADAS) and autonomous driving capabilities. These systems depends on high-performance processors, sensors, and communication technologies to provide quick decision-making, and ensures the safety of passengers and pedestrians. Furthermore, with ongoing investments from automotive manufacturers and technology companies in autonomous driving research and development, there is a projected surge in demand for advanced semiconductor components. This anticipated rise in demand is expected to promote the growth within the automotive semiconductor market, highlighting the industry's commitment to enhance autonomous driving capabilities.

Restraints

Supply Chain Disruptions to Prevent Industry Growth

Vulnerability to supply chain disruptions is a notable constraint for the automotive semiconductor market. Geopolitical tensions, natural disasters, and unforeseen global events, such as the COVID-19 pandemic, hold the potential to disrupt the complicated supply chains which are crucial for semiconductor production. These disruptions in the supply chain can result in the shortage of essential components. This limitation highlights the imperative need to develop flexible supply chain strategies within the industry. Additionally, proactive measures such as supplier diversification and strategic emergency preparation are essential for reducing the impact of supply chain interruptions. These efforts are vital for ensuring the steady expansion and stability of the automotive semiconductor market.

Recent Developments

• In December 2023, Intel Corporation acquired GlobalFoundries, expanding its foundry capabilities and securing crucial chip production capacity. The company is looking to strengthen its position in the automotive chip market through vertical integration and foundry independence.
• In November 2023, Qualcomm Technologies, Inc. unveiled the Snapdragon Ride Platform Gen 4, a next-generation automotive SoC with enhanced AI capabilities for ADAS and autonomous driving.
• In October 2023, NVIDIA Corporation partnered with a major automaker to develop and implement AI-powered in-vehicle infotainment systems. The company is collaborating with industry leaders to bring advanced AI features and user experiences to vehicles.

• In November 2023, Texas Instruments Incorporated invested in expanding its silicon carbide (SiC) power chip production capacity for electric vehicles. The aim it to capitalize on the growing demand for SiC chips for efficient power conversion in EVs.

• In December 2023, NXP Semiconductors N.V. introduced a new family of radar SoCs for advanced driver-assistance systems (ADAS).

Automotive Semiconductor Market

Key Players:

• Intel Corporation
• Qualcomm Technologies, Inc.
• NVIDIA Corporation
• Texas Instruments Incorporated
• NXP Semiconductors N.V.
• STMicroelectronics N.V.
• Infineon Technologies AG
• Renesas Electronics Corporation
• ON Semiconductor Corporation
• Analog Devices, Inc.
• Microchip Technology Inc.
• ROHM Semiconductor
• Cypress Semiconductor Corporation
• Maxim Integrated
• Samsung Electronics Co., Ltd.
• Other Prominent Players (Company Overview, Business Strategy, Key Product Offerings, Financial Performance, Key Performance Indicators, Risk Analysis, Recent Development, Regional Presence, SWOT Analysis)

Regional Analysis

Automotive Semiconductor Market is segmented based on regional analysis into five key regions: North America, Latin America, Europe, Asia Pacific and the Middle East and Africa. The Asia Pacific region will likely dominate the global automotive semiconductor market, establishing a substantial market presence. This dominance is due to the rapid expansion of the automotive industry in emerging countries such as China, India, and Japan, which is supported by active government initiatives that are aimed at promoting the growth of semiconductor sector. Furthermore, the surge in demand for electric vehicles, particularly in China, serves as a key driver for the market's continuous expansion. Moreover, the increasing adoption of commercial electric vehicles in nations like India, Japan, and South Korea is expected to contribute to the market growth.

Source: Fatpos Global

Impact of Covid-19 on Automotive Semiconductor Market

COVID-19 epidemic caused a huge disruption in the automotive semiconductor sector. Global supply chain challenges caused by lockdowns and staffing issues resulted in delays and shortages in semiconductor production. Moreover, economic uncertainty and low consumer spending resulted in low vehicle production, which impacted demand for semiconductor components. The shift in customer behavior toward remote work impacted the demand of automobiles and semiconductors. However, the epidemic boosted interest in electric vehicles, which resulted in the demand for certain EV-related semiconductor components. Thus, the supply-demand imbalance, along with growing demand in other industries, caused a spike in semiconductor costs, and had a major impact on the cost structure of manufacturing companies.

Automotive Semiconductor Market is further segmented by region into:

• North America Market Size, Share, Trends, Opportunities, Y-o-Y Growth, CAGR – United States and Canada
• Latin America Market Size, Share, Trends, Opportunities, Y-o-Y Growth, CAGR – Mexico, Argentina, Brazil, and Rest of Latin America
• Europe Market Size, Share, Trends, Opportunities, Y-o-Y Growth, CAGR – United Kingdom, France, Germany, Italy, Spain, Belgium, Hungary, Luxembourg, Netherlands, Poland, NORDIC, Russia, Turkey, and Rest of Europe
• Asia Pacific Market Size, Share, Trends, Opportunities, Y-o-Y Growth, CAGR – India, China, South Korea, Japan, Malaysia, Indonesia, New Zealand, Australia, and Rest of APAC
• Middle East and Africa Market Size, Share, Trends, Opportunities, Y-o-Y Growth, CAGR – North Africa, Israel, GCC, South Africa, and Rest of MENA

Automotive Semiconductor Market Scope and Segments:

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