Global Automotive Semiconductor Market

Automotive Semiconductor Market was valued at USD 62.35 Bn in 2023 and is expected to reach USD 109.66 Bn by 2030, at a CAGR of 8.4 % during the forecast period.

Automotive Semiconductor Market Overview

The governments across the world have called on industry to create technological standards for more than 30 important automotive semiconductors by 2025 and more than 70 types by 2030.

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For instance, China aims to build a home grown semiconductor supply chain that is safe from the threat of U.S. sanctions. Semiconductors are a weak link in China's drive to become an automotive superpower by using its head start in the shift from gasoline-fuelled cars to EVs.

Central-compute chips, such as domain control units (DCUs) and sensors, are poised for rapid expansion, with revenues expected to increase by approximately 12 percent annually from 2025 to 2030. By the end of this period, they are forecasted to represent nearly one-third of total revenues. In contrast, chips for decentralized electronic control units (ECUs) and sensors are anticipated to experience more modest annual growth of around 6 percent from 2019 to 2030.

The automotive semiconductor market serves as an important component in the automotive industry, providing the technology necessary for the functioning of various electronic systems within vehicles. As vehicles become increasingly advanced with features such as advanced driver assistance systems (ADAS), infotainment systems, connectivity solutions, and electric powertrains, the demand for automotive semiconductors continues to grow.

NVIDIA the top automotive semiconductor manufacturing provides an end-to-end development platform for autonomous vehicles. The DRIVE AGX Developer Kit is an in-vehicle platform designed for developing production-level autonomous vehicles. NVIDIA's AV Infrastructure platform encompasses the necessary data center hardware, software, and workflows to support the entire autonomous driving technology development process, including data collection, neural network development, and rigorous testing and validation in simulation environments.

Automotive Semiconductor Market Dynamics

New Semiconductors in Vehicles: Major Improvements in Connectivity to boost Automotive Semiconductor Market growth

Contemporary automobiles are equipped with cutting-edge electronics and functionalities designed to assist drivers during their journeys. In-vehicle GPS stands out as a pivotal technology that has undergone notable enhancements over the past decade. The functionality of this GPS relies on the incorporation of modern semiconductors within vehicles, which significantly boosts the Automotive Semiconductor Market growth. Driving the operation of these GPS systems is the High-grade legacy node semiconductor system, meticulously integrated during the manufacturing and assembly stages of modern vehicles. A multifunctional semiconductor chip processes all crucial data, guaranteeing precise and rapid vehicle control.

The strategic integration of semiconductors within vehicles facilitates the efficient operation of various components, which increases the Automotive Semiconductor Market share. Semiconductor chips play a vital role in Engine Control Units (ECUs), which are integral to modern vehicles. Numerous ECUs are distributed throughout the vehicle, each assigned to specific tasks, primarily overseeing essential engine performance parameters. Within vehicles, semiconductors are utilized for analyzing data from engine temperature and pressure sensors, fine-tuning fuel injection for optimal combustion, optimizing ignition timing, and overseeing emissions management. In essence, semiconductors within vehicles are indispensable for enhancing fuel efficiency and mitigating greenhouse gas emissions.

Semiconductor Technology: Backbone of Electric Vehicles (EVs)

Traditional vehicles relied on fuel or gas, emitting harmful gases that significantly contributed to global warming and ozone depletion. In recent times, the adoption of electric vehicles powered by batteries has emerged as a leading strategy to combat these environmental challenges. While conventional companies employ Silicon semiconductor chips for automotive electronics, researchers have been exploring novel semiconductor materials such as silicon carbide (SiC) and Gallium Nitride (GaN) for automotive applications. These advanced materials outperform silicon, especially in high-power applications crucial for Electric Vehicles (EVs).

Silicon Carbide (SiC) has undergone decades of development and is swiftly emerging as the preferred material for electric vehicle (EV) manufacturers. This preference stems from its ability to minimize conduction and switching losses, coupled with its higher maximum operating temperature. Already, SiC is the driving force behind millions of EVs currently navigating roads worldwide, which significantly boost the Automotive Semiconductor Market growth. These ground-breaking power semiconductor devices boast remarkable efficiency, exceeding the 90% threshold, thanks to their capacity to switch on and off tens of thousands of times per second. Autonomous vehicles hold immense potential to revolutionize the transportation sector by offering safety capabilities akin to those of superhuman standards. Realizing these advanced capabilities hinges on the seamless integration of efficient sensors and high-performance computers, both heavily reliant on sophisticated semiconductor technologies. The burgeoning interest in autonomous vehicles among the public is poised to substantially bolster the automotive semiconductor market. According to MMR, semiconductor wafer revenue generation is going to be nearly 30% over the next 10 to 12 years, primarily driven by the proliferation of electronic and autonomous vehicles.

Increase in cost of vehicles to limit Automotive Semiconductor Market growth

A failing component negatively affect the vehicle performance. Component processors, including microprocessors, and SoCs are complex and most of the interlinked controls affect each other. Even if one component fails or is tampered with, it lead to in-operation of the vehicle, which is expected to limit the Automotive Semiconductor Market growth. Cars with MCU controlled features largely do not have secondary backups as a way to compensate for human error owing to the excess cost burden. A faulty MCU pose a significant safety risk in crucial applications. Running diagnostics is required to ensure that a complex semiconductor part such as the SoC or MCU needs to be replaced or repaired. A replacement MCU then needs to be reprogrammed once it is installed, and further testing is required to ensure seamless operation with the vehicle.

These services incur additional labor costs. Furthermore, repairing an MCU is highly precise and technical work. It involves disassembling the module itself, running diagnostics, and performing critical electronics and circuitry work, which requires specially trained technicians. These components are also highly susceptible to hacking and in case of a malicious attack lead to failure to deliver critical information for systems such as crash avoidance, control braking, among others and all these factor are significantly restraining the Automotive Semiconductor Market growth.

Automotive Semiconductor Market Segment Analysis

Based on Component, the market is segmented into Processor, Analog IC, Discrete Power Device, Sensor, Memory Device, and Others. Analog IC segment dominated the market in 2023 and is expected to hold the largest Automotive Semiconductor Market share over the forecast period. Electronics are the chief differentiators between the competing automakers. In terms of numbers, automotive electronics per car typically include hundreds of sensors, tens of electronic control units (ECUs) processing systems, miles of cable harnesses, and extensive network systems. Analog ICs are required to assist all these processors, power devices, sensors, and other electronic components of the automobile to perform the task and to transfer the controls instructions and signals from one system to other, which significantly boost the Automotive Semiconductor industry growth.

Growing electrification of the powertrain segment not only generating a huge demand for power devices but also showcasing the opportunity to supporting analog ICs to grow significantly in the coming years. In the report, under the analog ICs segment, MMR has also covered the market for logic ICs and the connectivity devices. The analog ICs primarily used in a vehicle are amplifiers, interfaces, converters, comparators, ASIC, ASSP, regulators, drivers, logic ICs, and infotainments, telematics, and connectivity devices.

Based on Vehicle Type, Passenger Car, Light Commercial Vehicle (LCV), and Heavy Commercial Vehicle (HCV). Passenger Car segment dominated the market in 2023 and is expected to hold the largest Automotive Semiconductor Market share over the forecast period. The passenger car is the largest segment with the highest production and demand globally. Passenger cars comprise sedans, hatchbacks, station wagons, sport utility vehicle (SUVs), multi-utility vehicles (MUVs), and vans. This is the most promising market for automotive semiconductor, owing to the fact that this is the largest segment in the automotive industry. Passenger cars continue to be mostly equipped with gasoline-powered engines globally.

In China, there is a higher demand for electric powered passenger vehicles compared to the rest of the world. The semiconductor content in electric or hybrid vehicles is more than the normal passenger cars. The major area of semiconductor application in these vehicles is the powertrain. The increasing demand for the electric and hybrid vehicles owing to the growing environmental concerns is the key opportunity for the automotive semiconductor manufacturers.

Automotive Semiconductor Market Regional Insight

In 2023, new auto sales in China surged by 12% to a remarkable 30.09 million vehicles, with exports nearing 5 million, cementing China's position as the world's premier auto exporter, surpassing Japan and therefore china is known as the largest Exporter of Automotive Semiconductor. China spearheaded global advancements in electric vehicles (EVs) and other new-energy vehicles, witnessing a substantial 38% surge in sales, totalling 9.49 million vehicles. The term "new-energy vehicles," coined in China, encompasses plug-in hybrids and fuel cell vehicles, which directly boost the China Automotive Semiconductor Market growth.

EVs and autonomous vehicles demand a higher volume of semiconductors compared to traditional automobiles. A leading Chinese automaker revealed that EVs are equipped with approximately 1,300 semiconductors each, contrast to the roughly 500 found in gasoline-powered vehicles. Under government encouragement, Chinese automakers are venturing into semiconductor development, which is expected to boost the China Automotive Semiconductor Market growth. Zhejiang Geely Holding Group, the parent company of Volvo Cars, integrates its own proprietary semiconductors into its line-up of sport utility vehicles. Semiconductor advancement in the automotive sector is a key focus for Semiconductor Manufacturing International Corp. (SMIC), a leading Chinese contract chipmaker, as highlighted by a senior executive.

China's journey towards self-sufficiency in this domain is far from complete. In the realm of power semiconductors, crucial for regulating electric current and enhancing EV performance, domestic production meets only approximately 15% of China's demand, as reported by Maximize Market Research. In the domain of advanced chips indispensable for autonomous driving, Chinese production falls short, accounting for less than 5%. Despite a burgeoning landscape of approximately 300 Chinese companies engaged in automotive semiconductor development, domestic technological advancements have lagged behind the evolving needs of the auto industry. China continues to rely heavily on imports. Globally, industry leadership in this domain is dominated by key players such as Germany's Infineon Technologies, NXP Semiconductors from the Netherlands, Japan's Renesas Electronics, and U.S.-based chipmaker Texas Instruments.

In 2022, the Japan launched the Leading-edge Semiconductor Technology Center to serve as an R&D hub. The goal for officials is an increase in annual semiconductor revenue to more than ¥13 trillion by 2030.

Automotive Semiconductor Market Competitive Landscape

Major companies operating in the market deploy acquisitions, collaborations, and partnerships to expand their business and grab untapped opportunities in emerging markets. For example, NXP Semiconductors partnered with Hailo, a leading edge Artificial Intelligence chipmaker, in December 2021 to launch several joint Al solutions for automotive Electronic Control Units (ECUs). The joint solutions combine NXP's safe and efficient automotive processors (S32G and Layerscape) along with the high-performance Hailo-8 Al processor.

1. In November 2020, Infineon entered into an agreement with GT Advanced Technologies to expand its supply base for silicon carbide (SiC) boules. SiC is the basis for power semiconductors that are particularly efficient, robust, and cost-effective at the system level. With this supply contract, the German semiconductor manufacturer adds a different element to secure its growing base material demand in this area.

The Japanese government is trying to attract big players like ASML Holding; already piling in are Taiwan Semiconductor Manufacturing, Samsung Electronics and Mitsubishi Chemical Group. Successfully drawing in these semiconductor giants has cost tens of billions, even trillions, of yen, which significantly boosts the Japan Automotive Semiconductor Market growth.

1 April 9 2024: Infineon Technologies continued to maintain its leading market position in automotive semiconductors in 2023. Infineon’s overall market share increased by one percentage point, from nearly 13 percent in 2022 to about 14 percent in 2023, solidifying the company’s position as the global leader in the automotive semiconductor market. Infineon’s semiconductors are essential in serving all automotive key applications like driver assist and safety systems, powertrain and battery management, comfort, infotainment and security.

2. May 28, 2023: MediaTek Partners with NVIDIA to Transform Automobiles with AI and Accelerated Computing MediaTek, a leading innovator in connectivity and multimedia, is teaming with NVIDIA to bring drivers and passengers new experiences inside the car. NVIDIA is a world-renowned pioneer and industry leader in AI and computing. With this partnership, their collaborative vision is to provide a global one-stop shop for the automotive industry, designing the next generation of intelligent, always-connected vehicles.

3. January 9, 2024: Intel unveiled its latest automotive AI chips, entering into direct competition with rivals NVIDIA and Qualcomm in the automotive chip market. In a bid to strengthen its position, Intel also announced the acquisition of automotive chip company Silicon Mobility.

Automotive Semiconductor Market Scope: Inquire Before Buying

Automotive Semiconductor Market, by Region

North America (United States, Canada and Mexico)
Europe (UK, France, Germany, Italy, Spain, Sweden, Austria and Rest of Europe)
Asia Pacific (China, South Korea, Japan, India, Australia, Indonesia, Malaysia, Vietnam, Taiwan, Bangladesh, Pakistan and Rest of APAC)
Middle East and Africa (South Africa, GCC, Egypt, Nigeria and Rest of ME&A)
South America (Brazil, Argentina Rest of South America)

Leading Automotive Semiconductor manufacturers include:

Europe:
1. NXP: Eindhoven, Netherlands
2. Infineon: Neubiberg, Germany
3. Robert Bosch GmbH: Gerlingen, Germany
4. STMicroelectronics: Geneva, Switzerland
5. ASM Technologies: Almere, Netherlands
North America:
1. Intel: Santa Clara, California, United States
2. Qualcomm: San Diego, California, United States
3. Texas Instruments: Dallas, Texas, United States
4. Applied Materials: Santa Clara, California, United States
5. Nvidia: Santa Clara, California, United States
6. AMD: Santa Clara, California, United States
7. Analog Devices: Norwood, Massachusetts, United States
8. Broadcom: San Jose, California, United States
9. Ford: Dearborn, Michigan, United States
10. Micron Technology: Boise, Idaho, United States
11. Allegro: Manchester, New Hampshire, United States
Asia-Pacific:
1. Fuji Electric: Tokyo, Japan
2. Renesas: Tokyo, Japan
3. Toshiba: Tokyo, Japan
4. DENSO: Kariya, Japan
5. MosChip Technologies: Hyderabad, India
6. ROHM: Kyoto, Japan
7. TSMC (Taiwan Semiconductor Manufacturing Company): Hsinchu, Taiwan
8. Tata Elxsi: Bangalore, India

Frequently asked Questions:

1. What are the objectives of the government's guidelines on automotive semiconductors?
Ans: The government aims to establish technological standards for over 30 crucial automotive semiconductors by 2025 and over 70 types by 2030 to build a domestic semiconductor supply chain resilient to U.S. sanctions.

2. What role do automotive semiconductors play in modern vehicles?
Ans: Automotive semiconductors are crucial for the operation of various electronic systems within vehicles, including advanced driver assistance systems (ADAS), infotainment systems, connectivity solutions, and electric powertrains.

3. What challenges limit the growth of the automotive semiconductor market?
Ans: Factors such as the high cost of vehicles due to semiconductor integration and the complexity of repairing semiconductor components pose challenges to market growth.

4. How does the automotive semiconductor market vary regionally?
Ans: China leads in electric vehicle sales and semiconductor production, while Japan focuses on R&D initiatives to enhance semiconductor revenue. Other regions, such as Europe and North America, also play significant roles in semiconductor development and adoption in the automotive sector.