Automotive semiconductor market size to grow by USD 26.67 billion between 2022 and 2027, APAC will account for 62% of the market growth, Technavio

NEW YORK, March 11, 2024 /PRNewswire/ -- The automotive semiconductor market size is set to grow by USD 26,676.35 million during 2022 and 2027, progressing at a CAGR of 8.8% during the forecast period. In the forecast period, the Asia-Pacific (APAC) region is set to contribute significantly, estimated at 62%, to the global market growth. Technavio analysts delve into regional trends and driving forces shaping this trajectory. Notably, APAC is experiencing accelerated adoption of automotive technologies across all vehicle segments—entry, mid, and luxury. Key nations driving this market expansion include China, Japan, South Korea, and India. Factors such as the burgeoning presence of automotive manufacturers and the uptake of cutting-edge solutions drive this growth. Economic prosperity, particularly in China and India, has bolstered consumer disposable income, amplifying demand for passenger cars equipped with advanced automotive components. Anticipated surges in demand for high-end vehicles with sophisticated infotainment systems, alongside a rising population of high-net-worth individuals in China, are expected to fuel APAC's market expansion throughout the forecast period.

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Frequently Asked Questions:

• Based on segmentation by application, which is the leading segment in the market?
  By application, the market will observe maximum growth in the telematics and infotainment segment.
   
• What are the major trends in the market?
  Increased developments in semi-autonomous and autonomous vehicles are identified as the key trend in the market.
   
• At what rate is the market projected to grow?
  The market growth is projected to grow at a CAGR of 8.8% during the forecast period.
   
• Who are the top players in the market?
  Allegro MicroSystems Inc., Analog Devices Inc., BorgWarner Inc., Continental AG, DENSO Corp., Elmos Semiconductor AG, Infineon Technologies AG, Intel Corp., Microchip Technology Inc., Micron Technology Inc., NXP Semiconductors NV, ON Semiconductor Corp., Qualcomm Inc., Renesas Electronics Corp., Robert Bosch GmbH, ROHM Co. Ltd., Samsung Electronics Co. Ltd., STMicroelectronics NV, Texas Instruments Inc., and Toshiba Corp. are the top players in the market.
   
• What are the key market drivers and challenges?
  The market is driven by the rising adoption of advanced driver assistance system (ADAS) features in vehicles. However, the lack of standard protocols will challenge the growth of the market.
   
• How big is the APAC market?
  APAC will account for 62% of the market growth during the forecast period.

Market Segmentation

• Application 
• Telematics and Infotainment
• Powertrain
• Safety
• Body Electronics
• Chassis
• Vehicle Type 
• Passenger vehicle
• Light commercial vehicle
• Heavy commercial vehicle
• Geography 
• APAC
• North America
• Europe
• South America
• Middle East and Africa

The market growth in the telematics and infotainment segment will be significant over the forecast period. Semiconductors are the vital components of vehicle telematics and infotainment systems. The increasing focus on improving passenger safety has led to the development of vehicle telematics that is combined with telecommunications and information technology. In addition, the benefits of the use of telematics and infotainment systems such as real-time fleet monitoring, enhanced fleet efficiency, lesser fuel consumption, and the use of cloud computing technology in vehicles are driving the growth of the segment.

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Key Companies

The global automotive semiconductor market is fragmented. The market is characterized by the presence of numerous large and medium-sized manufacturers. Most large and established players have extensive sales and distribution networks globally. Small players are concentrated in regional markets. Vendors compete based on parameters such as price, quality, technology, brand identity, and distribution. Key vendors have a vast geographical presence and large-scale production facilities. There are a few small regional vendors with significant market shares. Rivalry among vendors is moderate. Therefore, vendors opt for pricing and marketing strategies to retain their existing market shares and seize new market opportunities. Some of the key vendors covered in the report include:

• Allegro MicroSystems Inc.
• Analog Devices Inc.
• BorgWarner Inc.
• Continental AG
• DENSO Corp.
• Elmos Semiconductor AG
• Infineon Technologies AG
• Intel Corp.
• Micron Technology Inc.
• NXP Semiconductors NV
• ON Semiconductor Corp.
• Qualcomm Inc.
• Renesas Electronics Corp.
• Robert Bosch GmbH
• ROHM Co. Ltd.

The market is driven by the rising adoption of advanced driver assistance system (ADAS) features in vehicles. 

Technological advances in terms of software algorithms, processors, and sensors have increased the application of ADAS in vehicles. In addition, the imposition of stringent safety norms by governments has pushed automobile manufacturers to incorporate ADAS technologies in their vehicles. For instance, in 2015, the European Commission made it mandatory to install a vehicle telematics system in all new vehicles from April 2018. Such factors are increasing the penetration of ADAS in vehicles, which is expected to drive the growth of the market in focus.

• The lack of standard protocols is identified as the major challenge in the market. 

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Analyst Review

The automotive semiconductor market stands at a pivotal juncture, driven by a convergence of factors ranging from connected cars to fuel efficiency standards and the rapid proliferation of electric vehicles (EVs). As the automotive industry undergoes a transformative shift towards sustainability and connectivity, semiconductor manufacturers are tasked with meeting the demands of an increasingly complex landscape.

One of the primary catalysts for this transformation is the surge in demand for ADAS (Advanced Driver Assistance Systems). These systems, equipped with a myriad of sensors and processors, play a crucial role in enhancing road safety by implementing active safety measures such as crash avoidance technology and automatic emergency braking systems. With a growing emphasis on mitigating carbon emissions and reducing road traffic crashes, the integration of ADAS into modern vehicles has become imperative.

Furthermore, the ongoing COVID-19 pandemic and geopolitical tensions such as the Russia-Ukraine war have underscored the vulnerabilities in the semiconductor supply chain, leading to disruptions in semiconductor production. This has prompted automotive manufacturers to reevaluate their supply chain strategies and explore alternatives to ensure a steady supply of electronic components crucial for mechanical and electrical systems within vehicles.

Amidst these challenges, semiconductor companies are innovating to meet the diverse needs of the automotive sector. From enhancing the performance of hybrid vehicles through efficient power management solutions to enabling seamless connectivity and real-time information in connected cars, the industry is witnessing a surge in discrete power segment technologies and memory devices segment advancements.

Leading players such as Qualcomm are spearheading the development of infotainment systems and telematics solutions, revolutionizing the in-car experience with an array of entertainment options and climate control systems. Meanwhile, Luxury cars are setting new standards in body electronics segment, offering features like power windows, electric seats, and advanced safety systems.

As the automotive semiconductor market continues to evolve, collaboration between manufacturers, policymakers, and technology providers will be crucial in navigating the complexities of the global automotive semiconductor market. With innovations in autonomous vehicles and semi-autonomous vehicles on the horizon, the industry is poised for further disruption, ushering in an era of unprecedented connectivity and safety on the roads.

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Market Overview

The Automotive Semiconductor Market is witnessing profound transformations driven by connected cars, electric vehicles, and stringent fuel efficiency standards. The surge in demand for hybrid vehicles underscores a pivotal shift towards eco-friendly alternatives. Integration of ADAS (Advanced Driver Assistance Systems) elevates safety standards, while supply chain optimization ensures seamless operations. The aftermarket segment sees innovations in diagnostic systems, empowering users with real-time insights into vehicle health via onboard diagnostic systems. Amidst these advancements, the market thrives on the development of robust mechanical components. As the automotive industry navigates towards sustainability and innovation, semiconductor technologies play a pivotal role in shaping its future trajectory.

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TOC

1. Executive Summary
2. Market Landscape
3. Market Sizing
4. Historic Market Size
5. Five Forces Analysis
6. Market Segmentation by Application
7. Market Segmentation by Vehicle Type
8. Customer Landscape
9. Geographic Landscape
10. Drivers, Challenges, and Trends
11. Company Landscape
12. Company Analysis
13. Appendix

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SOURCE Technavio