Automotive Chip Market: Global Industry Analysis and Forecast (2024-2030)

Automotive Chip Market size was valued at USD 45.50 Billion in 2023 and the total Automotive Chip Market Size is expected to grow at a CAGR of 9.4 % from 2024 to 2030, reaching nearly USD 85.34 Billion in 2030.
Automotive Chip Market Overview:
The Automotive chip is essentially functional, a high-computing chip produced with the development of smart cars. An electronic component made specifically for use in automobiles is known as an automotive chip. It is a semiconductor chip used in a variety of automotive applications, including advanced driver assistance systems (ADAS), gearbox control, infotainment systems, and engine management. It is employed to regulate and keep track of several vehicular operations, including braking, steering, and engine performance. Additionally, it is utilized to improve the driving experience by offering amenities like Bluetooth connectivity, GPS navigation, and music streaming. The chips are critical for the functioning of modern vehicles, as they enable the transmission and processing of data between various systems and components.

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The automotive chip market is not only benefiting from the growth of the electric and autonomous vehicle market but also from the increased connectivity features in modern cars. As cars become more connected, they require more advanced chips to handle the data processing and communication needs. The chips are used in various applications such as telematics, wireless charging, and advanced navigation systems. With the rise of 5G networks, the demand for automotive chips that can handle the increased data transfer speeds is also on the rise. The automotive chip market is expected to continue growing at a significant rate throughout the forecasts period. Automotive industry becomes increasingly dependent on chips to power the cars of the future.

1. Tesla had an internal chip design team as early as five years ago. The original focus was on MCUs. Later, the car manufacturer shifted chip design to power modules. For example, Hyundai Motor announced the establishment of a chip design team on September 4, while CRRC and BYD directly included the wafer factory in the scope of vertical integration.

2. A CPU chip for the automotive system called the Snapdragon Ride Flex SoC was introduced by Qualcomm Technologies, Inc. It manages assisted driving as well as cockpit features like entertainment. Taiwan Semiconductor Manufacturing Co. launched new software to make it easier for customers developing high-tech computer chips for automotive to benefit from its most recent innovations. The largest contract maker of semiconductors in the world is TSMC. Many of the largest chip manufacturers serving the automotive sector, including NXP Semiconductor and STMicroelectronics NV (STM.DE), use TSMC to produce their components.
Automotive Chip Market Dynamics:
The Rise of Automotive Chips in Modern Vehicles

The growing adoption of engine control units in vehicles is one of the major factors supporting the growth of the market. An electronic control unit is a set of computer systems that control and maintain all of the vehicle's electronic, electrical, and mechanical systems. The proliferation of connected vehicle technology and advanced driver assistance systems (ADAS) is also another factor driving the demand for vehicle electronics. Hybrid and pure electric cars and ADAS alone are expected to account for more than 45 percent of automotive electronics by 2030. Automotive Chips are generally utilized to track and regulate the various functions of a vehicle. Various algorithms are used to accomplish the function, consequently, a chip provides drivers with a smooth and simple driving experience. Consumers are increasingly interested in vehicles that are equipped with features like lane departure warning, adaptive cruise control, and automatic emergency braking. The features rely on a range of sensors and electronic systems, which in turn rely on automotive chips. Another factor driving the growth of the automotive chip market is the increasing complexity of vehicles. Modern cars are equipped with a range of electronic systems, including infotainment systems, navigation systems, and advanced driver assistance systems. All the systems require automotive chips to function properly.



In addition to consumer demand, government regulations are also driving growth in the automotive chip market. Many countries around the world have implemented regulations related to vehicle safety and emissions, which are driving the development of innovative technologies and features that rely on automotive chips. Therefore, advances in technology are also contributing to the growth of the automotive chip market. New manufacturing processes and materials are enabling the development of smaller, more powerful chips capable of handling increasingly complex tasks. This is allowing car manufacturers to incorporate more advanced features into their vehicles, which is driving demand for automotive chips.

Revolutionizing Automotive Chip Technology with NXP's UWB IC and GaN Semiconductor Innovations

NXP Semiconductors has introduced a new automotive UWB IC. UWB provides precise, secure, real-time localization capabilities unrivalled by other wireless technologies such as Wi-Fi, Bluetooth, and GPS. Ultra-wideband technology makes use of a very high bandwidth of 499.2MHz. This technology is designed to give spatial awareness to UWB-equipped cars, mobiles, and other smart devices, to enable cars to know exactly where the users are. GaN technology has the potential to increase electric vehicle sales by enhancing the range and charging experience and making the concept more appealing to the average driver. With up to 3x smaller, 3x lighter, 3x faster charging, and 40% energy savings, the next-generation (GaN) power semiconductor platform is positioned for market leadership in the $13.1 billion+ GaN electrification potential spanning mobile, consumer, enterprise, renewables/solar, and EV/EMobility.

Challenges and Costs in Developing Automotive Electronics

The wide variety in temperatures inside and outside cars is the largest issue with automobile electronics. Lack of cooling prevents chips from malfunctioning and aging too quickly. Performance chips raise emissions, harm the engine, and result in misfires when they are exposed to higher temperatures. Developing automotive chip applications requires significant investment in research, development, and testing. The complexity of automotive systems and the strict requirements for reliability and safety contribute to the high cost of chip development. The cost barrier prevents smaller players from entering the market and limits innovation.
Automotive Chip Market Segmentation:
By Application Type, Telematics & Infotainment is the largest segment with a market share of 36 % in the automotive Chip Industry. Telematics refers to the integration of data communication and data processing in vehicles. It includes the use of sensors, GPS, cellular communications, and internal computing to collect and transmit data relating to vehicle performance, location, and driver behaviour. Car chips play a key role in enabling telematics systems by processing data from various sensors and facilitating communication between the vehicle and external networks or servers.

Telematics systems monitor the condition of the vehicle in real-time and detect problems such as engine failures or low tire pressure. The information is relayed to the driver or fleet manager, enabling preventative maintenance and reducing the risk of breakdown. Telematics-enabled navigation systems provide drivers with real-time traffic updates, route recommendations, and points of interest. The systems use car chips to process GPS data and calculate optimal routes. Telematics systems allow drivers to remotely control certain vehicle functions, such as locking/unlocking the doors, starting the engine, or adjusting the climate control. The function increases the comfort of the user and the safety of vehicle owners. In addition to wireless local area networks, emergency warning systems telematics are developed like collision warning for international harmonization and standardization of vehicle-to-vehicle, infrastructure-to-vehicle, and vehicle-to-infrastructure to provide real-time, short-range communication systems. Information from telematics is also used extensively in car-sharing and auto insurance purposes.


Automotive Chip Market Regional Insight:
The Asia Pacific region holds the largest share of 38 % in 2023. Thailand, India, Japan, South Korea, China, and the Rest of Asia-Pacific are evaluated for the Asia-Pacific automotive Chip market growth analysis. Japan leads in terms of raw materials, small active-passive components, and equipment regarding semiconductors in the region. Also, the country has a significant advantage in upstream semiconductor materials along the semiconductor value chain. In addition, the country is capable of meeting the high standards of purity required for semiconductor materials. The rising demand for electric vehicles and government measures encouraging the adoption of electric vehicles are the main factors driving the growth of the automotive chip market in the area. Also, the region is experiencing a marked increase in vehicle production, which is projected to support the growth of the automotive chip industry in the area. TSMC and Samsung competed for dominance in the wafer foundry sector, stemming from the growing popularity of smartphones. The winner was determined by securing orders for application processors from tech giants like Apple, Qualcomm, and MediaTek. TSMC's outperformance showcased Taiwan's aggressive investments in semiconductor equipment.

NFC chip is one of the key NFC products available with various applications such as contactless mobile payments, information sharing, and information security. These chips produce a short-range radio signal used for sensitive financial and authentication data transmission. In Japan, several leading market players are actively developing NFC-based cashless payment devices and readers for the Japanese market, showing the rising adoption of NFC chips. Additionally, private organizations are also adopting NFC technology which is expected to boost the growth of the near-field communication market in Japan. The government of South Korea approved a service that enables the consumer to authenticate mobile payment by tapping a contactless card, which helps increase the need for NFC chips in South Korea. The rising penetration of smartphones also drives the market through the forecast period. The uncertainties surrounding technological competition between China and the US have also interrupted the global supply chain; for example, smartphone and network device manufacturers have stocked up on semiconductor components. Multinational companies have also held inventory volumes above their normal levels to offset the potential loss owing to the uncertainty of the entire market.

The combined factors have been a leading factor behind the supply shortage of semiconductor chips. China is also playing catch-up in semiconductor manufacturing. Both the Chinese government's 14th Five-Year Plan which offers support to the semiconductor industry and policies to attract talent help the manufacturing industry grow prosperously. In an environment that lacks the sharing of technology information, China cultivates more manufacturing talent, while simultaneously attracting talent from elsewhere. It is based on the consideration that human capital and manufacturing costs are stringently required by semiconductor manufacturers. Taiwan had three integrated circuit (IC) design companies listed in the top 10. The industry's development started early in Taiwan, benefiting from sufficient policy support, active personnel training, and a good momentum of development, especially during the pandemic. Taiwan's semiconductor value chain has been relatively complete for a long time and has been actively introducing advanced technologies while insisting on originality.

South Korea, During the time of US-Japan semiconductor trade friction, South Korean companies accelerated their efforts to catch up in the computer's memory field, causing Samsung's market share in computer memory to continue rising. Since the US did not impose high anti-dumping duties on Korean products, coupled with Japan's export controls on Korea, Korea has gradually reduced its dependence on the Japanese market and replaced them. Facing an increasingly competitive semiconductor industry, Samsung Electronics and SK Hynix, the two leading South Korean semiconductor companies, are preparing to expand their market to Texas. South Korea's government plans to promote an alliance between the country's semiconductor companies and auto companies to increase the domestic semiconductor chips used in vehicles amid a shortage of semiconductors.



Automotive Chip Market Competitive Landscape:

1. August 31, 2023, Roseville, California – Bosch has completed the acquisition of assets of the U.S. chipmaker TSI Semiconductors Corporation (TSI Semiconductors), based in Roseville, California. The new company is called Robert Bosch Semiconductor LLC. In April 2023, Bosch announced its intention to acquire certain assets of TSI Semiconductors. With this acquisition, Bosch is establishing significant manufacturing capacity in an important market. Starting in 2026, the first chips will be produced on 200-millimeter wafers based on the innovative material silicon carbide (SiC). Bosch plans to invest some $1.5 billion to transform the Roseville site into a facility that produces and tests silicon carbide semiconductors, which are key building blocks for electric vehicles.
2. March 8, 2024, the semiconductor industry is poised for a market rebound in 2H24. New semiconductor manufacturing facilities are entering construction or preparing to begin chip production. Due to low consumer demand in 2023, some chip manufacturers have readjusted their schedules, no longer expected to commence production in 2024, as previously suggested. In the United States, the government's delay in awarding the CHIPS Act’s highly coveted subsidies has led to slowdowns in construction as manufacturers wait to receive additional funding.
3. May 8 ,2023, Qualcomm Incorporated (NASDAQ: QCOM) announced that its subsidiary, Qualcomm Technologies, Inc., has entered into a definitive agreement to acquire Autotalks. The transaction is subject to customary closing conditions. May 8, 2023.
4. In July of 2023, One of the most monumental tech acquisitions on record is set to take place with Broadcom’s $61 billion acquisition of VMware — the chipmaker company’s third multibillion-dollar tech deal in just four years. The deal is speculated to be a largely strategic move to both expand Broadcom’s portfolio beyond semiconductors while also blocking competitors from utilizing VMware’s software to make their Fibre Channel Host-Bus Adapters (FC HBAs) run more efficiently.
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Global Automotive Chip Market


Report Coverage
Details


Base Year:
2023
Forecast Period:
2024-2030


Historical Data:
2018 to 2023
Market Size in 2023:
US $ 45.50 Bn.


Forecast Period 2024 to 2030 CAGR:
9.4%
Market Size in 2030:
US $ 85.34 Bn.


 Segments Covered:
by Component Type
Logic ICs
Analog ICs
Microcontrollers & Microprocessors
Memory


by Application Type
Chassis
Powertrain
Safety
Telematics & Infotainment
Body Electronics


by Vehicle Type
Passenger Vehicles
Commercial Vehicles



Automotive Chip Market, by Region
North America (United States, Canada and Mexico)
Europe (UK, France, Germany, Italy, Spain, Sweden, Austria, Turkey, Russia and Rest of Europe)
Asia Pacific (China, India, Japan, South Korea, Australia, ASEAN and Rest of APAC)
Middle East and Africa (South Africa, GCC, Egypt, Nigeria and Rest of ME&A)
South America (Brazil, Argentina, Columbia and Rest of South America)
Automotive Chip Market Key Players:
1.Infineon Technologies - Germany
2. Renesas Electronics Corporation- Japan
3. STM Microelectronics- Switzerland
4. Robert Bosch- Germany
5. Texas instruments- United States
6. NXP Semiconductors- Netherlands
7. ON Semiconductor- United States,
8. Atmel Corporation- United States
9. Elmos Semiconductor AG- Germany
10. Maxim Integrated Products- United States
11. Microchip Technology- United States
12. AQUANTIA CORP- United States
13. NVIDIA CORPORATION- United States
14. Qualcomm Technologies- United States
15. JET Performance- United States
16. DiabloSport- United States
17. Hypertech- United States
18. Bully Dog- United States
19. Superchips- United States
20. Sprint Booste- United States

Frequently Asked Questions:
1] What segments are covered in the Automotive Chip Market report?
Ans. The segments covered in the Automotive Chip Market report are based on, Component Type, Application Type, and Vehicle Class.

2] Which region is expected to hold the highest share in the Automotive Chip Market?
Ans. The Asia Pacific region is expected to hold the highest share of the Automotive Chip Market.

3] What is the market size of the Automotive Chip Market by 2030?
Ans. The market size of the Automotive Chip Market by 2030 will be $ 85.34 Billion.

4] What is the forecast period for the Automotive Chip Market?
Ans. The Forecast period for the Automotive Chip Market is 2024- 2030.