PUBLISHER: Stratistics Market Research Consulting | PRODUCT CODE: 1209896
PUBLISHER: Stratistics Market Research Consulting | PRODUCT CODE: 1209896
According to Stratistics MRC, the Global Automotive Semiconductor Market is accounted for $48.9 billion in 2022 and is expected to reach $78.4 billion by 2028 growing at a CAGR of 8.2% during the forecast period. Semiconductors are a unique class of electronic parts with the ability to conduct electricity under specific conditions. Vehicles use semiconductors to make sure the corresponding component works effectively under all circumstances. As the fundamental elements required for the proper operation of automotive electronics, silicon and germanium are used to make the semiconductors used in automobiles. Vehicles with semiconductors installed can control a variety of functions, including the air conditioning system's operation and the vehicle's safety.
According to Bloomberg, the electric vehicle market is expected to witness growth of 35% by 2040. Thus, it is an opportunity for semiconductor manufacturers to grow globally, as semiconductors are an integral part of electric vehicles.
Rise in demand for safety features
Due to the rise in traffic accidents worldwide, there is an increasing demand for safety features like parking assistance, collision avoidance systems, lane departure warnings, traction control, electronic stability control, tyre pressure monitors, airbags, and telematics. Automotive semiconductors are a key component in many advanced driver assistance systems (ADAS) technologies. These systems can detect and classify objects in the path of the vehicle, and in response, can alert the driver to the immediate surroundings and traffic conditions. Additionally, based on calculations made by semiconductors & related components, these systems can also automatically slow down or stop the vehicle depending on the road conditions. Road accidents are a leading cause of death worldwide.
Increasing Overall Vehicle Cost
The cost of the vehicle is predicted to increase due to the rising demand for vehicle electrification and the adoption of various automotive semiconductors to make the vehicle advanced and provide better safety to the consumer. This is predicted to be one of the key factors impeding the market's growth.
Growing demand for electric and hybrid vehicles
Globally, interest in electric and hybrid vehicles is rising. The main factor that is anticipated to lead to the development of a mass market for electrical vehicles in the near future is the declining cost of components like lithium-ion batteries, sensors, and microcontrollers. Additionally, electric vehicles are being strongly promoted by governments worldwide because of their critical role in reducing carbon emissions and combating air pollution. Only few newly purchased vehicles are electric at the moment, but as component costs come down, both consumers and manufacturers are moving toward electric vehicles where there is a scope for the market to expand.
Operational failures in extreme climatic conditions
The automotive semiconductor market is primarily constrained by its operational shortcomings in extreme climatic conditions, such as extreme cold and extreme heat. Extreme heat causes semiconductors to melt or break, increasing resistance and making the signal too weak, which is why failures happen. On the other hand, resistance is decreased and it becomes stable when it is moved to an ideal temperature. Extreme cold is also unfavourable for semiconductors because it causes them to stop functioning. It can operate at temperatures as low as -25°C and as high as +150°C on average. As a result, nations like Canada and Russia prefer using fewer semiconductors. This causes consumers to switch to using alternative electronic components, which has an impact on market expansion.
The COVID-19 pandemic outbreak and the subsequent steps taken to reduce the infection rate caused significant commercial volatility, which had a detrimental effect on industries around the world. The epidemic has caused significant setbacks in a number of industries, especially the automotive semiconductor market. Sales of semiconductors for automotive applications are significantly impacted by the number of vehicles sold as well as how much these vehicles are electrified and digitalized. The COVID-19 pandemic outbreak has caused a significant decline in car sales. Reduced sales of both passenger and commercial vehicles had a negative impact on the expansion of the automotive semiconductor market. As a result, there was also a delay in the production and delivery of raw materials for the electric vehicle industry. Due to anticipated delays in international export and import shipments, the production and delivery of raw materials for the electric vehicle industry were both delayed.
The Integrated Circuits segment is expected to have the highest CAGR during the forecast period
During the forecast period, Integrated Circuits segment is expected to have the highest CAGR. In today's automobiles, electronics are the chief differentiators between the competing automakers. 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. Growing electrification of the powertrain segment not only generating a huge demand for power devices but also showcasing the opportunity to supporting integrated circuits to grow significantly in the years ahead.
The Passenger Vehicles segment is expected to be the largest during the forecast period
The passenger vehicle segment held the largest market share of over 65% and is anticipated to hold the largest share during the forecast period. The high demand for passenger cars around the world is responsible for this growth. Along with providing hands-free phone connectivity, navigation services, climate control, voice control, parking assistance, two-way communication tools, and internet access, more and more automotive infotainment systems are being installed in passenger cars, which is further boosting the segment's growth.
Region with largest share:
Due to the expansion of the automotive industry, particularly in developing nations like India, China, and Japan, the Asia Pacific region is predicted to hold the largest share during the forecast period. In 2020, the region held a market share of over 40%. China was the market leader in Asia Pacific in 2020 and is anticipated to hold this position going forward. Additionally, in the upcoming years, the region's expanding e-commerce sector will drive up demand for commercial vehicles.
Region with highest CAGR:
Over the forecast period, Europe is expected to witness highest CAGR. Electric car chips are expected to be in high demand as electric cars become more and more common in Europe. The demand for automotive semiconductors will be significantly impacted by the growing use of semiconductor devices in Europe's automotive safety and infotainment systems. Due to the presence of important automobile manufacturing companies in the country, Germany is anticipated to be a significant market for automotive microcontroller manufacturers. Moreover, automakers are also continually concentrating on designing, innovating, and developing autonomous vehicles as they have attracted a sizable portion of customers in major automotive manufacturing nations.
Key players in the market
Some of the key players profiled in the Automotive Semiconductor Market include ON Semiconductor Corporation, Analog Devices Inc, NXP Semiconductor NV, Infineon Technologies AG, Renesas Electronics Corporation, STMicroelectronics NV, ROHM Co., Ltd., Semiconductor Components Industries, LLC, Toshiba Corporation, Texas Instrument Inc., Robert Bosch GmbH, Micron Technology and Robert Bosch GmbH.
In October 2022, Micron Technology Inc. intended to invest up to USD 100 billion over the coming 20-plus years to construct a new mega fab in Clay, New York, with the first phase investment of USD 20 billion planned by the end of the following decade. Micron's New York mega fab is part of its strategy to gradually increase American-made leading-edge DRAM production to 40% of its global output over the next decade. Micron's DRAM production in the United States brings tremendous benefits to its customers, enabling them to build innovative products.
In June 2022, Renesas Electronics Corporation developed circuit technologies for 22-nm embedded STT-MRAM with faster read and write execution for microcontrollers in IoT applications. The test chip includes a 32-megabit embedded MRAM memory cell array and executes 5.9-nanosecond random read credentials at a maximum junction temperature of 150°C and a write throughput of 5.8-megabyte-per-second.
In February 2022, STMicroelectronics has unveiled a new line of automotive microcontrollers (MCUs). Its Stellar E MCUs provide on-chip high speed control loop processing and are specifically made for next-generation software defined EVs.
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