The global automotive semiconductor market is poised for substantial growth, with a projected Compound Annual Growth Rate (CAGR) of 11.97% from 2022 to 2028. The latest report from Research and Marketsnoted that the surge is primarily attributed to the increasing development of autonomous vehicles, driving a heightened demand for automotive semiconductors that encompass sensors, processors, and communication technologies.
The semiconductor market is characterised by significant fragmentation, hosting both local and international players. Key global vendors include Robert Bosch, Continental, Infineon Technologies, NXP Semiconductors, DENSO Corporation, Renesas Electronic Corporation, and others. The competition among these industry giants is intense, prompting a continuous need for innovation to maintain a robust market presence.
1. Growing Electric Vehicle (EV) Industry
The burgeoning EV sector emerges as a pivotal force propelling the automotive semiconductor market. EVs necessitate advanced power electronics, relying on critical semiconductors such as insulated gate bipolar transistors (IGBTs) and silicon carbide (SiC) devices for efficient power conversion and energy management. Semiconductors play a crucial role in battery management systems (BMS), ensuring optimal performance and safety through voltage and current sensing, temperature monitoring, and cell balancing.
2. Semiconductors Shortage
However, the industry grapples with a significant challenge – a shortage of semiconductors. This shortage reverberates across the global automotive industry, leading to production delays, reduced vehicle availability, and disruptions in the supply chain. A comprehensive, collaborative approach among stakeholders is imperative to address this multifaceted challenge.
By Component the microcontrollers dominate the market, contributing to around 37% of the global automotive semiconductor market. The various components in this market, driven by factors like innovation, technological advancements, consumer demand, and regulatory standards, collectively influence vehicle performance, safety, connectivity, and user experience.
In terms of application, the powertrain application segment takes the lead in 2022. The increasing complexity of modern powertrain systems demands powerful and sophisticated semiconductors for efficient control. Additionally, safety systems, including adaptive cruise control, lane departure warning, and automatic emergency braking, heavily rely on semiconductor components.
By vehicle type, the passenger vehicles lead the market, propelled by the incorporation of new features and the growing electric vehicle industry. Semiconductors in passenger vehicles serve various purposes, ranging from infotainment systems and ADAS features to powertrain control. Commercial vehicles, driven by powertrain control, telematics, fleet management systems, safety features, and in-cabin technologies, are also witnessing an increasing need for advanced semiconductor solutions.
According to the report, the Asia Pacific (APAC) emerges as the dominant force in the global automotive semiconductor market, exhibiting a CAGR of around 12%. This dominance is fueled by economic growth, business expansions, and increased automotive activities, particularly in China. The region's semiconductor manufacturers, such as Taiwan's TSMC and South Korea's Samsung, play a critical role in providing advanced manufacturing capabilities for automotive chips.
Opportunities, Trends, Growth Enablers
The report identifies several opportunities and trends shaping the market, including the growing adoption of silicon carbide, advancements in modern vehicle features, the rise of autonomous vehicles, and the high demand for infotainment and telematics services. Market growth enablers encompass the expanding electric vehicle industry, the prevalent usage of system-on-chip, and the demand for advanced automotive semiconductors facilitating AI, ML, and IoT.
On the flip side, market restraints include a shortage of skilled labour and, notably, the shortage of semiconductors. These challenges underscore the need for strategic interventions and collaborative efforts within the industry.
In conclusion, the global automotive semiconductor market presents a landscape of opportunities and challenges, navigating through technological advancements, market dynamics, and the transformative shift towards electrification in the automotive industry. Stakeholders must remain agile, innovative, and collaborative to harness the market's potential and address its evolving challenges effectively, the report mentioned.
Courtesy: Research and Markets. Photo is representational; courtesy: Renesas.