Automotive semiconductor market is expected to grow at a CAGR of 12% during the forecast period of 2022 to 2030. In spite of the shortage of automotive semiconductors around the world, it is anticipated that the market revenues will surpass $115 billion by 2030 from $36 billion in 2020. The development of vehicle-based technology, such as the introduction of advanced driver assistance systems (ADAS), telematics, and infotainment, as well as an increased propensity toward the purchase of electric vehicles, contributes to the expansion of the automotive semiconductor market around the world.
The global community is currently facing an unprecedented economic, humanitarian, and healthcare challenge as a result of COVID-19. Because of the disease's rapid spread, there has been a marked decrease in the demand for public transportation around the world, which has had a substantial influence on the global transportation business. By the end of the year 2020, the situation had been brought under control in certain nations; as a result, the demand and supply gap had been closed, and there had been considerable growth in the product development of technologies that have a wider range of applications in advanced vehicles. Despite the fact that sales of all consumer goods experienced a precipitous decline in the first half of 2020 and those sales of automobiles fell precipitously - by as much as 80% in some regions - demand for these products rebounded more than anticipated later in the year, continued to increase in 2022, and is still robust today.
Both the supply chain for semiconductors and the market for automotive have been subjected to further uncertainty as a result of Russia's invasion of Ukraine. For instance, Ukraine provides about 25% to 35% of the world's purified neon gas, and Russia provides between 25% to 30% of the palladium that is used in semiconductors. Both of these commodities are rare metals. Another complexity is that the majority of semiconductors are shipped via air, yet the costs of shipping have dramatically grown while the volume of available cargo space has decreased. Another issue is that original equipment manufacturers (OEMs) have been unable to obtain essential vehicle components, such as wiring harnesses, and as a result, they have decreased the volume of their production. This has resulted in an increase in uncertainty because it has decreased the demand for certain semiconductor-based components. However, during the forecast period, the market players are expected to mitigate these challenges through short-term and long-term demand planning and drawing an effective technology map.
In the automotive industry, a semiconductor is used to control the fail-safe system, manage the functions of the electrical control unit, and create automotive fault tolerant systems. These systems are responsible for handling errors that occur in the vehicle and they communicate this information to the microcontrollers and safety systems. As a result, semiconductors are an essential component of the automotive sector, and the rapid development of the automotive industry is anticipated to be a primary contributor to the expansion of the market throughout the period covered by the forecast.
According to a report that was published by the World Health Organization in 2021, about 1.3 million people lose their lives in collisions with motor vehicles. In addition, the number of youths who die as a result of injuries sustained in car accidents is higher. Because of the rise in the number of traffic collisions that have occurred all over the world, there has been a discernible upward trend in the demand for various safety features. These features include parking assistance, collision avoidance systems, lane departure warnings, traction control, electronic stability control, tyre pressure monitors, airbags, and telematics.
The operational failures of automotive semiconductors in extreme climatic conditions such as extreme cold and excessive heat are the primary factor restraining the market for automotive semiconductors. Failures can occur when severe heat is present because semiconductors have a tendency to melt or crack, the resistance increases, and this causes the signal to be too weak. This is the root cause of failures. On the other hand, the resistance drops and the system becomes stable when it is brought to the optimum temperature. In addition to this, excessive cold is not good for semiconductors since it causes them to cease functioning properly.
The increasing scarcity of chips is forcing businesses in the automobile industry to place orders for additional semiconductors that are around 10 to 20 percent higher than what is required. Businesses in all sectors are placing an increasing number of ad hoc orders, frequently at an extremely high average sales price.
Although the chip shortage is having an effect on a wide variety of industries, the automobile sector is particularly hard hit because of some distinct characteristics that make the problem even worse. For instance, a large number of original equipment manufacturers (OEMs) and Tier 1 suppliers implement a just in time manufacturing strategy, in which they place orders for semiconductors and other vehicle components close to the time of production in order to minimize the costs associated with inventory. Because of the decline in vehicle sales at the beginning of 2020, original equipment manufacturers (OEMs) and Tier 1 suppliers cut back on their chip purchases, leaving them short of stock when demand began to rise again. Companies operating in sectors that do not adhere to the just-in-time ordering methodology were in a stronger position, particularly given that some of these businesses had already acquired additional capacity before the automotive players canceled or decreased their orders.
The key factor that is expected to lead to the demand for electrical vehicles during the future period is the reduction of the cost of individual components such as lithium-ion batteries, sensors, and microcontrollers. In addition, electric vehicles play an essential part in reducing carbon emissions and dealing with air pollution; as a result, governments in all nations are aggressively promoting electric vehicles due to this function that electric vehicles play. At this time, just 1% of newly purchased automobiles are electric vehicles; however, as the price of component parts continues to fall, consumers and manufacturers are increasingly gravitating toward electric vehicles. The market for electrical vehicles is anticipated to grow at 35% by the year 2040.
Micro components held the largest share of revenues in 2021. It is anticipated that the increasing use of micro components (processors) in a variety of automotive systems, including anti-lock braking systems (ABS), tyre pressure monitoring systems (TPMS), electronic stability control (ESC), and others, will drive the growth of this segment during the forecast period of 2022 to 2030. As a consequence of this, it is projected that the micro-components segment will hold a significant portion of the market share. During the period covered by the forecast, it is also projected that there will be an increase in demand for discrete semiconductor devices at a consistent rate.
During the course of the forecast period, it is anticipated that the safety subsegment of applications would dominate the global market for automotive semiconductors. The landscape of the global automotive semiconductor industry is expected to see the safety segment rise at a higher compound annual growth rate (CAGR) than any other application during the forecast period with a contribution of over 25% by 2030.
North America dominated in terms of market revenues in 2021. It is anticipated that the consumption of automotive semiconductors in North America will lead the way in terms of share in the global automotive semiconductor industry. It is anticipated that government measures to improve the automobile manufacturing industry and the increased usage of technologies such as IoT in various vehicles will be major trends boosting the potential for the automotive semiconductor market in this area. Through the year 2030, this region's automotive industry will experience a surge in sales of automobile computer chips due to the rapid adoption of cutting-edge technologies.
A significant rise in demand for electric car chips is anticipated to take place during the forecast period as a direct result of the expanding appeal of electric vehicles in the European region. The growing application of semiconductor components into automobile infotainment and safety systems in Europe will likewise have a significant impact on the demand for automotive semiconductors in that region. Due to the fact that Germany is home to a number of significant automobile manufacturing businesses, it is projected that Germany will become a significant market for automotive microcontroller manufacturers.
Through the year 2030, it is anticipated that the increased sales of automobiles in East Asia as a result of rising disposable income and changing customer preferences will have a noticeable influence on the demand for automobile computer chips in this region. It is anticipated that semiconductor makers for automobiles in this region will gain from the growing need for automotive safety systems such as ADAS, TPMS, ABS, and other similar systems, as well as the growing sales of luxury automobiles. Due to the robust nature of China's automotive manufacturing industry as well as its semiconductor manufacturing industry, it is anticipated that China would lead sales of automotive semiconductors in this region.
In order to satisfy the ever-increasing demand for computer chips used in automobiles all over the world, suppliers of automotive semiconductors are putting a primary emphasis on the growth of their production and manufacturing capacities. Research and development, the supply of raw materials, assembly and manufacture, system integration, marketing and sales, automobile manufacturing, end users, and post-sale service are the components that make up the ecosystem of the automotive semiconductor market. The world's leading manufacturers of automotive semiconductors are implementing a variety of business tactics to increase both their sales potential and their market presence on a worldwide scale. The key companies in this market include Renesas Electronics Corp. (Japan), Infineon Technologies AG (Germany), STMicroelectronics N.V. (Switzerland), and NXP Semiconductors N.V (Netherlands) among others. The system integrators include Texas Instruments, Inc. (US), Denso Corp. (Japan), Delphi Automotive PLC (UK), and Standard Motor Products, Inc. (the US), among others.
This study report represents analysis of each segment from 2020 to 2030 considering 2021 as the base year. Compounded Annual Growth Rate (CAGR) for each of the respective segments estimated for the forecast period of 2022 to 2030.
The current report comprises of quantitative market estimations for each micro market for every geographical region and qualitative market analysis such as micro and macro environment analysis, market trends, competitive intelligence, segment analysis, porters five force model, top winning strategies, top investment markets, emerging trends and technological analysis, case studies, strategic conclusions and recommendations and other key market insights.
The complete research study was conducted in three phases, namely: secondary research, primary research, and expert panel review. Key data point that enables the estimation of the Automotive Semiconductor market is as follows:
This product will be delivered within 2 business days.
Impact of COVID-19
The global community is currently facing an unprecedented economic, humanitarian, and healthcare challenge as a result of COVID-19. Because of the disease's rapid spread, there has been a marked decrease in the demand for public transportation around the world, which has had a substantial influence on the global transportation business. By the end of the year 2020, the situation had been brought under control in certain nations; as a result, the demand and supply gap had been closed, and there had been considerable growth in the product development of technologies that have a wider range of applications in advanced vehicles. Despite the fact that sales of all consumer goods experienced a precipitous decline in the first half of 2020 and those sales of automobiles fell precipitously - by as much as 80% in some regions - demand for these products rebounded more than anticipated later in the year, continued to increase in 2022, and is still robust today.
Impact of Russia - Ukraine War
Both the supply chain for semiconductors and the market for automotive have been subjected to further uncertainty as a result of Russia's invasion of Ukraine. For instance, Ukraine provides about 25% to 35% of the world's purified neon gas, and Russia provides between 25% to 30% of the palladium that is used in semiconductors. Both of these commodities are rare metals. Another complexity is that the majority of semiconductors are shipped via air, yet the costs of shipping have dramatically grown while the volume of available cargo space has decreased. Another issue is that original equipment manufacturers (OEMs) have been unable to obtain essential vehicle components, such as wiring harnesses, and as a result, they have decreased the volume of their production. This has resulted in an increase in uncertainty because it has decreased the demand for certain semiconductor-based components. However, during the forecast period, the market players are expected to mitigate these challenges through short-term and long-term demand planning and drawing an effective technology map.
Semiconductors are Crucial Element in Automotive
In the automotive industry, a semiconductor is used to control the fail-safe system, manage the functions of the electrical control unit, and create automotive fault tolerant systems. These systems are responsible for handling errors that occur in the vehicle and they communicate this information to the microcontrollers and safety systems. As a result, semiconductors are an essential component of the automotive sector, and the rapid development of the automotive industry is anticipated to be a primary contributor to the expansion of the market throughout the period covered by the forecast.
Semiconductor Application in Enhancing Vehicle Safety Remains as the Key Market Driver
According to a report that was published by the World Health Organization in 2021, about 1.3 million people lose their lives in collisions with motor vehicles. In addition, the number of youths who die as a result of injuries sustained in car accidents is higher. Because of the rise in the number of traffic collisions that have occurred all over the world, there has been a discernible upward trend in the demand for various safety features. These features include parking assistance, collision avoidance systems, lane departure warnings, traction control, electronic stability control, tyre pressure monitors, airbags, and telematics.
Climatic Conditions are Crucial for Fail-Proof Operations of Semiconductors
The operational failures of automotive semiconductors in extreme climatic conditions such as extreme cold and excessive heat are the primary factor restraining the market for automotive semiconductors. Failures can occur when severe heat is present because semiconductors have a tendency to melt or crack, the resistance increases, and this causes the signal to be too weak. This is the root cause of failures. On the other hand, the resistance drops and the system becomes stable when it is brought to the optimum temperature. In addition to this, excessive cold is not good for semiconductors since it causes them to cease functioning properly.
Chip Shortage Calls for an Effective Demand Analysis for Effective Inventory Management
The increasing scarcity of chips is forcing businesses in the automobile industry to place orders for additional semiconductors that are around 10 to 20 percent higher than what is required. Businesses in all sectors are placing an increasing number of ad hoc orders, frequently at an extremely high average sales price.
Although the chip shortage is having an effect on a wide variety of industries, the automobile sector is particularly hard hit because of some distinct characteristics that make the problem even worse. For instance, a large number of original equipment manufacturers (OEMs) and Tier 1 suppliers implement a just in time manufacturing strategy, in which they place orders for semiconductors and other vehicle components close to the time of production in order to minimize the costs associated with inventory. Because of the decline in vehicle sales at the beginning of 2020, original equipment manufacturers (OEMs) and Tier 1 suppliers cut back on their chip purchases, leaving them short of stock when demand began to rise again. Companies operating in sectors that do not adhere to the just-in-time ordering methodology were in a stronger position, particularly given that some of these businesses had already acquired additional capacity before the automotive players canceled or decreased their orders.
Increasing Demand for Electric Vehicle to Support High CAGR Trend
The key factor that is expected to lead to the demand for electrical vehicles during the future period is the reduction of the cost of individual components such as lithium-ion batteries, sensors, and microcontrollers. In addition, electric vehicles play an essential part in reducing carbon emissions and dealing with air pollution; as a result, governments in all nations are aggressively promoting electric vehicles due to this function that electric vehicles play. At this time, just 1% of newly purchased automobiles are electric vehicles; however, as the price of component parts continues to fall, consumers and manufacturers are increasingly gravitating toward electric vehicles. The market for electrical vehicles is anticipated to grow at 35% by the year 2040.
Micro Components to Continue as the Most Dominant Market Segment
Micro components held the largest share of revenues in 2021. It is anticipated that the increasing use of micro components (processors) in a variety of automotive systems, including anti-lock braking systems (ABS), tyre pressure monitoring systems (TPMS), electronic stability control (ESC), and others, will drive the growth of this segment during the forecast period of 2022 to 2030. As a consequence of this, it is projected that the micro-components segment will hold a significant portion of the market share. During the period covered by the forecast, it is also projected that there will be an increase in demand for discrete semiconductor devices at a consistent rate.
Safety Continues to be Most Demanded Application Segment
During the course of the forecast period, it is anticipated that the safety subsegment of applications would dominate the global market for automotive semiconductors. The landscape of the global automotive semiconductor industry is expected to see the safety segment rise at a higher compound annual growth rate (CAGR) than any other application during the forecast period with a contribution of over 25% by 2030.
North America Remains to be the Global Leader
North America dominated in terms of market revenues in 2021. It is anticipated that the consumption of automotive semiconductors in North America will lead the way in terms of share in the global automotive semiconductor industry. It is anticipated that government measures to improve the automobile manufacturing industry and the increased usage of technologies such as IoT in various vehicles will be major trends boosting the potential for the automotive semiconductor market in this area. Through the year 2030, this region's automotive industry will experience a surge in sales of automobile computer chips due to the rapid adoption of cutting-edge technologies.
A significant rise in demand for electric car chips is anticipated to take place during the forecast period as a direct result of the expanding appeal of electric vehicles in the European region. The growing application of semiconductor components into automobile infotainment and safety systems in Europe will likewise have a significant impact on the demand for automotive semiconductors in that region. Due to the fact that Germany is home to a number of significant automobile manufacturing businesses, it is projected that Germany will become a significant market for automotive microcontroller manufacturers.
Through the year 2030, it is anticipated that the increased sales of automobiles in East Asia as a result of rising disposable income and changing customer preferences will have a noticeable influence on the demand for automobile computer chips in this region. It is anticipated that semiconductor makers for automobiles in this region will gain from the growing need for automotive safety systems such as ADAS, TPMS, ABS, and other similar systems, as well as the growing sales of luxury automobiles. Due to the robust nature of China's automotive manufacturing industry as well as its semiconductor manufacturing industry, it is anticipated that China would lead sales of automotive semiconductors in this region.
Top Tier Companies Strategizing to Effectively Counter the Issue of Chip Scarcity
In order to satisfy the ever-increasing demand for computer chips used in automobiles all over the world, suppliers of automotive semiconductors are putting a primary emphasis on the growth of their production and manufacturing capacities. Research and development, the supply of raw materials, assembly and manufacture, system integration, marketing and sales, automobile manufacturing, end users, and post-sale service are the components that make up the ecosystem of the automotive semiconductor market. The world's leading manufacturers of automotive semiconductors are implementing a variety of business tactics to increase both their sales potential and their market presence on a worldwide scale. The key companies in this market include Renesas Electronics Corp. (Japan), Infineon Technologies AG (Germany), STMicroelectronics N.V. (Switzerland), and NXP Semiconductors N.V (Netherlands) among others. The system integrators include Texas Instruments, Inc. (US), Denso Corp. (Japan), Delphi Automotive PLC (UK), and Standard Motor Products, Inc. (the US), among others.
Historical & Forecast Period
This study report represents analysis of each segment from 2020 to 2030 considering 2021 as the base year. Compounded Annual Growth Rate (CAGR) for each of the respective segments estimated for the forecast period of 2022 to 2030.
The current report comprises of quantitative market estimations for each micro market for every geographical region and qualitative market analysis such as micro and macro environment analysis, market trends, competitive intelligence, segment analysis, porters five force model, top winning strategies, top investment markets, emerging trends and technological analysis, case studies, strategic conclusions and recommendations and other key market insights.
Research Methodology
The complete research study was conducted in three phases, namely: secondary research, primary research, and expert panel review. Key data point that enables the estimation of the Automotive Semiconductor market is as follows:
- Research and development budgets of manufacturers and government spending
- Revenues of key companies in the market segment
- Number of end users and consumption volume, price, and value.
- Geographical revenues generate by countries considered in the report
- Micro and macro environment factors that are currently influencing the Automotive Semiconductor market and their expected impact during the forecast period.
Market Segmentation
By Component (2020-2030; US$ Million)
- Processor
- Analog IC
- Discrete Power
- Sensor
- Memory
- Others
By Vehicle Type (2020-2030; US$ Million)
- Passenger Car
- Light Commercial Vehicle
- Heavy Commercial Vehicle
By Application (2020-2030; US$ Million)
- Powertrain
- Safety
- Body Electronics
- Chassis
- Telematics & Infotainment
By Fuel Type (2020-2030; US$ Million)
- Gasoline
- Diesel
- Electric/Hybrid Electric Vehicle (EV/HEV)
Region Segment (2020-2030; US$ Million)
- North America
- U.S.
- Canada
- Europe and UK
- UK
- Germany
- Spain
- Italy
- France
- RoE
- Asia Pacific
- China
- Japan
- India
- Australia
- South Korea
- RoAPAC
- Latin America
- Brazil
- Mexico
- RoLATAM
- Africa
- GCC
- Africa
- RoME
Global Impact of Covid-19 Segment (2020-2021; US$ Million )
- Pre Covid-19 situation
- Post Covid-19 situation
Key questions answered in this report
- What are the key micro and macro environmental factors that are impacting the growth of Automotive Semiconductor market?
- What are the key investment pockets with respect to product segments and geographies currently and during the forecast period?
- Estimated forecast and market projections up to 2030.
- Which segment accounts for the fastest CAGR during the forecast period?
- Which market segment holds a larger market share and why?
- Are low and middle-income economies investing in the Automotive Semiconductor market?
- Which is the largest regional market for Automotive Semiconductor market?
- What are the market trends and dynamics in emerging markets such as Asia Pacific, Latin America, and Middle East & Africa?
- Which are the key trends driving Automotive Semiconductor marketgrowth?
- Who are the key competitors and what are their key strategies to enhance their market presence in the Automotive Semiconductor market worldwide?
This product will be delivered within 2 business days.
Table of Contents
1. Preface
2. Executive Summary
3. Automotive Semiconductor Market: Business Outlook & Market Dynamics
4. Automotive Semiconductor Market: By Component, 2020-2030, USD (Million)
5. Automotive Semiconductor Market: By Vehicle Type, 2020-2030, USD (Million)
6. Automotive Semiconductor Market: By Application, 2020-2030, USD (Million)
7. Automotive Semiconductor Market: By Fuel Type, 2020-2030, USD (Million)
8. North America Automotive Semiconductor Market, 2020-2030, USD (Million)
9. UK and European Union Automotive Semiconductor Market, 2020-2030, USD (Million)
10. Asia Automotive Semiconductor Market, 2020-2030, USD (Million)
11. Latin America Automotive Semiconductor Market, 2020-2030, USD (Million)
12. Middle East and Africa Automotive Semiconductor Market, 2020-2030, USD (Million)
13. Company Profiles
Companies Mentioned
- Delphi Automotive PLC (UK)
- Denso Corp. (Japan)
- Infineon Technologies AG (Germany)
- NXP Semiconductors N.V (Netherlands)
- Renesas Electronics Corp. (Japan)
- Standard Motor Products, Inc. (US)
- STMicroelectronics N.V. (Switzerland)
- Texas Instruments, Inc. (US)
