Automotive Semiconductor Market | Contrive Datum Insights

The Global Automotive Semiconductor Market Size Was Valued At USD 53.06 Billion In 2021. The Market Is Projected To Grow From USD 59.22 Billion In 2023 To USD 103.85 Billion By 2029, Exhibiting A CAGR Of 8.4% During The Forecast Period.

Automotive Semiconductor Market Overview:

The global COVID-19 pandemic has been unprecedented and shocking. As a result, demand for automotive semiconductors is lower than expected in all regions compared to levels before the pandemic. Based on our research, the global market was 8.7% smaller in 2020 than it was in 2019.

One of the main things that is driving the growth of the automotive semiconductor market is the increasing sales of hybrid electric and electric vehicles and the development of highly autonomous vehicles to make driving safer. Adding more electronics to cars and making them more digitally connected will also boost the use of automotive semiconductors.

Also, rapid improvements in technology for automotive semiconductors are likely to drive market growth. For example, in January 2022, Infineon Technologies released a new family of 28 nm microcontrollers (MCUs) called the AURIX TC4x for eMobility, ADAS, automotive E/E architectures, and affordable Artificial Intelligence (AI) applications. Also in October 2021, Infineon Technologies AG released the SLI37 automotive security controller, which is an easy-to-design and reliable trust anchor for securing safety-critical automotive applications like 5G-ready eUICC (eCall), V2X communication, car access, or SOTA updates.

Also, the growth of the market has been helped by the fact that more cars are being made in more places. Even though about 80 million cars were made around the world in 2021, the graph is expected to go up over the next few years, which will be good for the global automotive semiconductor industry.

Market Dynamics:

Latest Trends:

Semiconductors are being used more and more by the automotive industry to help artificial intelligence (AI) in vehicles mimic improve, and support human actions while also taking advantage of the faster reaction times and pinpoint accuracy of machine-based systems. AI is used in the latest self-driving cars to make them easier, safer, and more convenient for both passengers and drivers. Using advanced machine learning techniques, Natural Language Processing (NLP), and in-car assistants, the car's systems can also respond to voice commands and figure out what to do in the car without any help from a person.

Even though self-driving cars and in-car assistants have a lot of technological potential, safety concerns and the desire to make sure users have a smooth and bug-free experience mean that these AI systems will likely be introduced slowly through smart automotive semiconductors. So, the growing use of artificial intelligence in cars is one of the most important factors driving the growth of the global market for automotive semiconductors.

Driving Factors:

Electric and hybrid vehicles are becoming more popular at the same time as vehicles with traditional internal combustion engines. This is because of strict emission rules, such as government subsidies and policies, the Kyoto Protocol, tax breaks for buying hybrid electric vehicles and batteries, and a growing awareness of the harmful effects diesel and gasoline-powered vehicles have on the environment, among other things. For example, the global sales of electric vehicle batteries (called "processors") grew by 121% in 2021 compared to the previous year, and China led the market with nearly 3 billion processors, which is 172% more than in 2020. In 2021, the number of new electric cars registered in Germany, the U.S., and the U.K. rose by 83%, 76%, and 62%, respectively. Also, according to information from BloombergNEF, the number of commercial and passenger ZEV vehicles in use around the world could reach 677 billion by 2040. Also, new data from BloombergNEF shows that plug-in hybrids and battery-electric cars will make up 7.2% of global car sales in 2021, up from 2.6% in 2019 and 4.3% in 2020. Companies are working hard to make a lot of EVs. Ford, General Motors, and other automakers have said that sales of all cars with no emissions will grow strongly by 2040.

So, the demand for automotive semiconductors went up because EVs need a lot of controls and sensors to make sure the engine works well, and more use of semiconductors can lead to big improvements. At the same time, microcontrollers, ICs, and other semiconductor modules are needed because hybrid and battery electric vehicles are becoming more popular. This is especially true when it comes to electrifying the powertrain. When compared to traditional internal combustion engine cars, hybrid and electric cars need more semiconductors to be made. For example, conventional vehicles need semiconductors worth USD 330, while hybrid electric vehicles need semiconductors worth USD 1,000. So, more people are likely to buy electric and hybrid cars, which will increase the demand for automotive semiconductors and speed up the growth of the market.

The auto industry has been moving steadily toward innovative ways to add electronics to cars to improve safety (radar and collision avoidance, automatic braking), infotainment (satellite radio and Bluetooth), navigation (GPS mapping), system monitoring, onboard computers, and many other features, including self-driving cars that are just starting to come out. Because of this, there has been a big rise in the need for electronic parts.

In electric and hybrid cars, the amount of semiconductors used is higher than in regular cars. Hybrid and electric cars need different parts, such as application-specific integrated circuits, high-performance microcontrollers, power MOSFETs, microprocessors, and others. So, the growing amount of electronics in cars gives the market good opportunities for growth.

Restraining Factors:

The vehicle may not work as well if one of its parts is broken. Component processors, like microprocessors, and SoCs are complicated, and most of the controls that are linked to each other have an effect on each other. So, even if one part breaks or is messed with, it could stop the vehicle from running. Most cars with MCU-controlled features don't have secondary backups to make up for human error because it would cost too much. So, a broken MCU can be a major safety risk in important applications. Diagnostics must be run to see if a complex semiconductor part like the SoC or MCU needs to be fixed or replaced. Once the new MCU is installed, it needs to be reprogrammed, and more testing is needed to make sure it works well with the car.

There are more labor costs for these services. Also, fixing an MCU is a very technical job that requires a lot of precision. It requires taking apart the module itself, running diagnostics, and doing important work with electronics and circuitry, which requires technicians with special training. Also, these parts are very easy to hack, which means that if someone tries to do something bad to them, they might not be able to send important information to systems like crash avoidance and control braking. So, these things are making it hard for the market to grow.

In each country where they do business, the big names in automotive semiconductors have to follow different laws and rules about the environment, data privacy, labour, health and safety, and more. For some operations, companies are also required by the government to get environmental permits and other permissions or licences. So, it is important to follow the different rules and procedures of regulatory, tax, judicial, and administrative bodies. Companies could be fined or punished in other ways if they break or don't follow laws, rules, licences, permits, or other permissions or authorizations. Also, if regulators find that one or more customers or distributors are not following laws and rules, players could see less demand for their products.

For example, the U.S. Export Administration Regulations, which are run by the U.S. Department of Commerce, are hard to understand and are getting stricter. So, these factors could hurt the market if we have to stop doing business with some customers or suppliers because rules change in the future. Also, global privacy laws, how they are enforced, and policy activities, like the EU General Data Privacy Regulation, are growing quickly and making it hard to follow the rules. So, different rules or legal problems around the world could slow down the growth of the market.

Segmentation Analysis:

By Component:

In 2021, the processor segment had the largest share of the market, and this is likely to stay the case during the forecast period. One of the main things driving the growth of the segment is the increased use of electronics in cars. Discrete power devices, on the other hand, are expected to have the highest CAGR of 10.3% during the period of the forecast.

Memory devices are likely to grow at the second-fastest rate. This growth may be due to the continued electrification of important automotive applications, like the powertrain, which is driving up demand for power devices like MOSFET and IGBT. In order to program multiple control systems into an autonomous vehicle, it is necessary to add more memory devices to each car. This is because people want safer cars with new features.

By Vehicle Type:

As of 2021, the market was dominated by passenger cars, and this is expected to stay the case during the forecast period. The growth is because more people around the world want to buy passenger cars. Also, the use of hands-free phone connections and climate control, navigational services, voice control, two-way communication tools, parking assistance, and internet service in passenger vehicles is helping the sector grow.

In the coming years, the commercial vehicle segment may grow the most. Commercial vehicle sales are likely to be helped by things like better roads, more cities being built quickly, the growth of e-commerce, and mining operations. Also, the top makers of commercial vehicles are putting a lot of effort into making commercial vehicles safer by developing and adding autonomous features.

By Propulsion:

In terms of sales, the ICE segment led the market in 2021 and is likely to do so again in 2029. This is because a lot of the Internal Combustion Engine (ICE) is made and sold all over the world. Also, different automakers are adding different electronic parts to ICE vehicles to make them safer and reduce pollution, which is also helping the segment grow.

Over the next few years, the electric vehicle segment is expected to grow at the fastest rate. Also, rising gas prices, growing concerns about the environment, and the low cost of running an electric car could help more people buy them. Also, strict emission rules for commercial vehicles in some of the world's biggest economies may make electric commercial vehicles more popular.

By Application:

In 2021, the safety segment had the biggest share of the market, and this is likely to stay the case over the next few years. Because of more accidents on the roads in many countries, stricter rules have been put in place to make sure vehicles are safe. To meet safety regulations, automakers add things like emergency braking systems and advanced driver assistance systems to vehicles. These things are what are making the market grow.

Over the next few years, the telematics and infotainment segment is expected to grow the fastest. Rising demand for infotainment and connectivity features like navigation systems, audio and video players, over-the-air updates, and smartphone connectivity is the main thing driving the segment's growth. Leading countries like the U.S. and Europe also require e-call services in cars, which is also a factor in the growth of the segment.

Regional Insights:

Asia-Pacific had a market share of USD 21.5 billion in 2021, making it the biggest market in the world. It may keep its market position in the years to come. The region should also have the highest CAGR from 2022 to 2029. The market is growing because countries like China, India, and Japan have some of the fastest-growing auto industries, and their governments are also helping the semiconductor industry grow in the area. The growth of the industry has also been helped by the high demand for electric cars in China. Also, more people in India, Japan, South Korea, and other places are buying commercial electric vehicles. This could help the market grow in the near future. For example, the China Passenger Car Association says that the number of sales of electric passenger cars in China grew by 169.1% in 2021, reaching about USD 2.99 million.

After Asia-Pacific, North America may have the fastest rate of growth. The market may grow because more electric cars and trucks are being sold in the U.S. Also, the commercialization and development of electric autonomous vehicles and Robo-taxis are getting more attention, which could lead to growth opportunities in the coming years.

Europe is the second market with the fastest growth. Europe's market is growing because of stricter rules on vehicle emissions, more support for electric vehicles, and more investment in autonomous vehicle technology.

During the period of the forecast, the rest of the world may have a high CAGR. Strong demand for battery-powered electric cars in places like Saudi Arabia, South Africa, the United Arab Emirates, Brazil, and others is likely to help the industry grow. Investing more in public charging infrastructure in Latin America and the Middle East may also encourage people to buy electric cars, which would help the market grow.

Scope Analysis

Recent Development:

• January 2022: Infineon Technologies announces the new AURIX TC4x 28nm microcontroller (MCU) family for January 2022. AI application.
• February 2022: STMicroelectronics unveiled a new automotive microcontroller (MCU) optimized for electric vehicles. Designed for next-generation software-defined EVs, STMicroelectronics' new Stellar E MCUs incorporate on-chip high-speed control loop processing. With the new Stellar E device, this platform enables a new value chain for EVs.
• June 2021: NXP Semiconductors N.V. The company has introduced two new families of S32Z and S32E processors that extend innovation and accelerate the integration of next-generation vehicular automotive applications with a range of real-time applications for area and area control, safety processing.
• In June 2022, ROHM released a new regulator (LDO) IC for stable primary-side (12V direct connection) power supply for various applications such as powertrain, body, ADAS, and automotive infotainment that operates stably with nanoscale output capacitance. did.
• In February 2022, Robert Bosch planned to invest in a semiconductor production facility in Reutlingen given the current chip shortage and growing demand for use in mobility and IoT applications. The new manufacturing facility will be built between 2022 and 2025.

Market Segmentation

By Component:

• Processor
• Analog IC
• Discrete Power Device
• Sensor
• Memory Device
• Others

By Vehicle Type:

• Passenger Cars
• Commercial Vehicles
• Others

By Propulsion Type:

• ICE
• Electric
• Others

By Application:

• Powertrain
• Safety
• Body Electronics
• Chassis
• Telematics & Infotainment
• Others

By Companies:

• Robert Bosch GmbH (Germany)
• Infineon Technologies AG (Germany)
• STMicroelectronics (Switzerland)
• NXP Semiconductors (Netherlands)
• Toshiba Corporation (Japan)
• On Semiconductor Corporation (U.S.)
• ROHM Co., Ltd. (Japan)
• Texas Instruments Incorporated (U.S.)
• Renesas Electronics Corporation (Japan)
• Denso Corporation (Japan)
• Others