The automotive chip market share is expected to increase by USD 6.97 billion from 2020 to 2025, and the market’s growth momentum will accelerate at a CAGR of 4.53%.
This market research report provides valuable insights on the post COVID-19 impact on the market, which will help companies evaluate their business approaches. Furthermore, this report extensively covers market segmentation by vehicle type (passenger and commercial) and geography (APAC, Europe, North America, South America, and MEA). The market report also offers information on several market vendors, including Infineon Technologies AG, Maxim Integrated Products Inc., Microchip Technology Inc., Micron Technology Inc., NVIDIA Corp., NXP Semiconductors NV, Renesas Electronics Corp., Robert Bosch GmbH, STMicroelectronics NV., and Texas Instruments Inc. among others.
What will the Automotive Chip Market Size be During the Forecast Period?
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Automotive Chip Market: Key Drivers, Trends, and Challenges
The increasing adoption of the engine control unit in vehicles is notably driving the market growth, although factors such as expensive and complex technology may impede the market growth. Our research analysts have studied the historical data and deduced the key market drivers and the COVID-19 pandemic impact on the automotive chip industry. The holistic analysis of the drivers will help in deducing end goals and refining marketing strategies to gain a competitive edge.
Key Market Driver
The increasing adoption of engine control unit in vehicles is one of the key drivers supporting the market growth. The electronic control unit is basically a set of computer systems that controls and maintains the entire electronics, electrical, and mechanical systems of a vehicle. Increasing demand for alternative vehicle choices and governments’ strict policy regulations on pollution control norms are transforming the powertrain technology of vehicles rapidly. The growing adoption of connected vehicle technology and advanced driver assistance systems (ADAS) is also another factor driving the demand for electronics in vehicles. It is expected that hybrid and pure electric vehicles and ADAS alone would contribute to over 45% of electronics in the car by 2030. Thus, the growing adoption of ECUs will fuel the demand for automotive chips during the forecast period.
Key Market Trend
The development of autonomous vehicles is another factor supporting the market growth. These cars are equipped with several wired and wireless communication protocols and many semiconductor devices. For instance, in July 2021, Waymo, the autonomous vehicle company of Alphabet Inc., announced its plan to invest around $2.5 billion in the development of its autonomous driving technology. Similarly, in April 2021, Nvidia Corp. launched Drive Atlan, an AI-enabled system-on-chip platform for autonomous vehicles. The chip combines a central processing unit (CPU), a graphics processing unit (GPU), and a data processing unit (DPU) on it that utilizes deep learning, machine vision accelerators, and Ampere-Next GPU resources to deliver 1,000 trillion operations per second (TOPS). Such instances will drive market growth during the forecast period.
Key Market Challenge
The expensive and complex technology are some of the factors hindering the market growth. Prices of semiconductor chips have been increasing since the last quarter of 2020 amid a global supply crunch. For instance, in September 2021, Taiwan Semiconductor Manufacturing Company (TSMC) announced its intention to increase the prices of most advanced chips by roughly 10%; less advanced chips would cost about 20% more. Thus, consumers would be paying more for chips from 2022 as foundries are increasing the prices of semiconductor chips by 20%. The prices of chips are expected to rise due to shortages in production capacity in comparison to their demand. Thus, the increasing prices of automotive chips will increase the net cost of automobiles. These issues and procedural complexities discourage chipset vendors from manufacturing chipsets, which poses a challenge to the market.
This market analysis report also provides detailed information on other upcoming trends and challenges that will have a far-reaching effect on the market growth. The actionable insights on the trends and challenges will help companies evaluate and develop growth strategies for 2021-2025.
Parent Market Analysis
Technavio categorizes the automotive chip market as a part of the global automotive components and accessories market. Our research report has extensively covered external factors influencing the parent market growth potential in the coming years, which will determine the levels of growth of the market during the forecast period.
Who are the Major Automotive Chip Market Vendors?
The report analyzes the market’s competitive landscape and offers information on several market vendors, including:
- Infineon Technologies AG
- Maxim Integrated Products Inc.
- Microchip Technology Inc.
- Micron Technology Inc.
- NVIDIA Corp.
- NXP Semiconductors NV
- Renesas Electronics Corp.
- Robert Bosch GmbH
- STMicroelectronics NV.
- Texas Instruments Inc.
This statistical study of the market encompasses successful business strategies deployed by the key vendors. The market is fragmented and the vendors are deploying organic and inorganic growth strategies to compete in the market.
Product Insights and News
- NVIDIA Corp. - The company offers automotive chips namely DRIVE Atlan.
To make the most of the opportunities and recover from post COVID-19 impact, market vendors should focus more on the growth prospects in the fast-growing segments, while maintaining their positions in the slow-growing segments.
The market forecast report offers in-depth insights into key vendor profiles. The profiles include information on the production, sustainability, and prospects of the leading companies.
Automotive Chip Market Value Chain Analysis
Our report provides extensive information on the value chain analysis for the market, which vendors can leverage to gain a competitive advantage during the forecast period. The end-to-end understanding of the value chain is essential in profit margin optimization and evaluation of business strategies. The data available in our value chain analysis segment can help vendors drive costs and enhance customer services during the forecast period.
The value chain of the automotive components and accessories market includes the following core components:
- Inputs
- Inbound logistics
- Operations
- Distribution and logistics
- Marketing and sales
- Service
- Industry innovations
The report has further elucidated on other innovative approaches being followed by manufacturers to ensure a sustainable market presence.
Which are the Key Regions for Automotive Chip Market?
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53% of the market’s growth will originate from APAC during the forecast period. China, Japan, and South Korea (Republic of Korea) are the key markets for automotive chips in APAC. Market growth in this region will be slower than the growth of the market in North America.
The increasing disposable income and the launch of new car models by OEMs will facilitate market growth in APAC over the forecast period. This market research report entails detailed information on the competitive intelligence, marketing gaps, and regional opportunities in store for vendors, which will assist in creating efficient business plans.
COVID Impact and Recovery Analysis
Manufacturing and industrial activities in APAC were adversely impacted in 2020 by the COVID-19 pandemic. However, industrial sectors such as automobile and manufacturing are expected to recover soon, with the declining number of COVID-19 cases in the region. Therefore, the expected resumption of various manufacturing and industrial activities will positively impact the growth of the regional market during the forecast period.
What are the Revenue-generating Vehicle Type Segments in the Automotive Chip Market?
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The market share growth by the passenger segment will be significant during the forecast period. The high volume sales of passenger cars across the globe are driving the growth of the segment. The segment witnessed high adoption of new technologies that enhance the comfort, convenience, and safety of vehicles. For instance, premium audio systems, which were earlier limited to the luxury cars segment, are now available in many mid-range car models. Owing to the above-mentioned factor, the demand for automotive chips is increasing in the passenger cars segment.
This report provides an accurate prediction of the contribution of all the segments to the growth of the market size and actionable market insights on post COVID-19 impact on each segment.
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Automotive Chip Market Scope |
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Report Coverage |
Details |
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Page number |
120 |
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Base year |
2020 |
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Forecast period |
2021-2025 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 4.53% |
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Market growth 2021-2025 |
$ 6.97 billion |
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Market structure |
Fragmented |
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YoY growth (%) |
2.97 |
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Regional analysis |
APAC, Europe, North America, South America, and MEA |
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Performing market contribution |
APAC at 53% |
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Key consumer countries |
China, US, Japan, Germany, and South Korea (Republic of Korea) |
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Competitive landscape |
Leading companies, Competitive strategies, Consumer engagement scope |
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Key companies profiled |
Infineon Technologies AG, Maxim Integrated Products Inc., Microchip Technology Inc., Micron Technology Inc., NVIDIA Corp., NXP Semiconductors NV, Renesas Electronics Corp., Robert Bosch GmbH, STMicroelectronics NV., and Texas Instruments Inc. |
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Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for the forecast period |
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Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
What are the Key Data Covered in this Automotive Chip Market Report?
- CAGR of the market during the forecast period 2021-2025
- Detailed information on factors that will drive market growth during the next five years
- Precise estimation of the market size and its contribution to the parent market
- Accurate predictions on upcoming trends and changes in consumer behaviour
- The growth of the automotive chip industry across APAC, Europe, North America, South America, and MEA
- A thorough analysis of the market’s competitive landscape and detailed information on vendors
- Comprehensive details of factors that will challenge the growth of market vendors
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