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The Automotive Ethernet Market Size is estimated to grow by USD 4.60 billion at a CAGR of 20.88% between 2022 and 2027. Market growth hinges on various factors, notably the escalating need for lightweight materials offering high bandwidth, the surging demand for driver assistance systems, and the imperative of future-proof technology. These elements collectively drive market expansion, reflecting a broader trend toward advanced solutions. The demand for lightweight materials with high bandwidth stems from industries seeking efficient, agile solutions. Similarly, the rising popularity of driver assistance systems underscores a shift toward safer, more automated driving experiences. Future-proof technology, capable of adapting to evolving needs, is increasingly sought after, ensuring longevity and adaptability in an ever-changing landscape. These factors converge to shape a market driven by innovation and adaptability, catering to evolving consumer and industry demands.
It also includes an in-depth analysis of drivers, trends, and challenges.
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This market research report extensively covers market segmentation by vehicle type (passenger cars and commercial vehicles), application (cameras and ADAS, infotainment, diagnostics, and network backbone), and geography (APAC, North America, Europe, South America, and the Middle East and Africa).
The market is driven by the demand for connected cars and the need for real-time sensor communication in vehicles. This technology supports advanced driver assistance systems (ADAS) and enables seamless in-vehicle entertainment. Unlike traditional protocols, Automotive Ethernet, including FlexRay, allows for remote services and over-the-air software upgrades, facilitating troubleshooting and enhancing data transmission speeds for streaming and multimedia services. It offers improved user interfaces and centralized architecture with zonal controllers, ensuring interoperability and efficiency. With the increasing complexity of automotive networks, Automotive Ethernet is crucial, leading to partnerships between automotive Ethernet hardware providers and automotive OEMs to meet market demands. Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
The increasing demand for high bandwidth and lightweight materials is notably driving market growth. Modern-day vehicles have an array of sensors installed in them. This has led to the development of more complex safety systems. All modules and systems are interconnected and communicate with the electronic control unit (ECU). As a result, traditional wiring harnesses and connectors are unable to support the bandwidth requirements owing to high-speed data transmission. To meet the bandwidth requirements, OEMs have been using shielded coaxial cables that provide higher bandwidth than unshielded cables. However, the shielding of cables has increased the cost of the vehicle and has also increased the weight of the vehicle. This has forced OEMs to invest in the development of networking technologies that employ lightweight materials at low costs and higher bandwidth limits.
BroadR-Reach ethernet technology uses a single twisted pair of unshielded copper wires to overcome electromagnetic interference (EMI) issues. This will result in a cost reduction of approximately 80% and a weight reduction of 20% as compared with popular technologies such as LVDS. In addition, once the ethernet industry witnesses widespread adoption, the cost of materials will further reduce owing to increased competition and economies of scale operations during the forecast period.
The use of ethernet to lay the backbone network of vehicles is the key trend in the market. Address-based messaging is one of the features of ethernet which makes it a strong contender to be used for backbone networks of vehicles. In address-based messaging, every data packet is attached to a source and destination address. This is used by switches in an ethernet network to send the data packets to the appropriate recipient in the network.
Any number of devices can be added to the network as long as there are empty ports in the switches. Many switches can be interconnected, thereby increasing the capacity of the network. This is the main reason for many manufacturers developing vehicle backbone networks with the help of ethernet. Although, the current standard, 1TPCE, may not be used for the same. The enhanced version, RTPGE, can be used to design the network backbone of future cars. Thus, the increasing use of ethernet in future cars will drive the growth of the market during the forecast period.
Skepticism about adopting ethernet in vehicles is the major challenge impeding the market growth. One of the main reasons preventing OEMs from adopting new technology is the initial high cost of adoption, as OEM margins have been shrinking owing to intense competition and increased material and labor costs. Many OEMs are still waiting for other OEMs to implement ethernet in the automotive sector as the technology is still new to the automotive sector and is yet to prove its mettle.
Also, OEMs are unable to evaluate the risks associated with the implementation as ethernet is still more expensive than CAN and LIN, which are the popular technologies used in most cars today. A few early adopter OEMs, such as Mercedes-Benz, are still implementing MOST rather than BroadR-Reach ethernet in their vehicles owing to the uncertainty associated with a new technology used to control critical functions in vehicles. Thus, the reasons preventing OEMs from adopting ethernet in vehicles will restrict the market growth during the forecast period.
The market share growth of the passenger cars segment will be significant during the forecast period. Passenger vehicles witnessed rapid electrification of mechanical components with the introduction of advanced features in safety, security, propulsion, connectivity, and environment. This resulted in an increased number of electronic control units (ECUs) in passenger vehicles (60-80 ECUs). As a result, automotive ethernet became crucial to handle data communication among ECUs. Thus, the segment is expected to grow in the future simultaneously, and the market will grow during the forecast period.
The passenger cars segment was valued at USD 969.60 million in 2017. The passenger car segment dominates the market. Automakers are focusing on increasing the safety level of passenger cars and are adopting advanced safety functions that need secure communications. Hence, the demand for automotive ethernet is increasing at a rapid rate during the forecast period.
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APAC is estimated to contribute 44% to the growth of the global market during the forecast period. The automotive ethernet in APAC will be driven by the increasing adoption of advanced driver-assistance systems (ADASs) in vehicles during the forecast period. China will be the frontrunner in the adoption of ADAS systems in APAC during the forecast period.
The rise in penetration of connected technologies and ADAS across all vehicle segments is a positive indication of the country's favorable positioning for the uptake of level 2 and 3 autonomous features in automobiles. Although the US is the first country to deploy fully autonomous vehicles, China leads the deployment of technology in volume. Therefore, though the country's current economic conditions directly impact the revenue of OEMs, China positive expression on the uptake of new technologies makes the region commercially attractive for several large multinationals.
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
System on Chip Engineering S.L. - The company offers automotive ethernet that minimizes cabling, lowering fuel consumption, manufacturing costs, and time to market. The company is involved in helping customers develop products faster and with confidence on targeted design platforms.
The market report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2023 to 2027, as well as historical data from 2017 to 2021 for the following segments.
The market is witnessing rapid growth, driven by the evolution of autonomous cars and the need for high-speed, reliable communication in vehicles. This technology enables vehicle-to-vehicle (V2V) communication, enhances traffic management, and supports telematics systems for vehicle diagnostics and performance data monitoring. Despite challenges like high installation costs and security implementation, Automotive Ethernet facilitates predictive maintenance and supports software-defined vehicles (SDVs). It ensures network security and compliance with automotive regulations, offering robust testing and validation services. With the adoption of the 1000Base-T1 standard and technologies like PAM3 encoding, Automotive Ethernet provides high data transfer rates and enables active ADAS features such as lane departure warning and automatic emergency braking. This technology serves as the communications backbone for vehicles, creating a virtual "highway" for data transit, and is integral to the development of high-performance in-car networks for entertainment systems, navigation, and in-car communication systems. As the industry embraces cutting-edge automotive technology, Automotive Ethernet is poised for further growth, offering immersive, enjoyable in-car experiences that meet the evolving demands of passengers and the industry's safety standards.
Market Scope |
|
Report Coverage |
Details |
Page number |
173 |
Base year |
2022 |
Historic period |
2017 - 2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 20.88% |
Market growth 2023-2027 |
USD 4.60 billion |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
20.6 |
Regional analysis |
APAC, North America, Europe, South America, and Middle East and Africa |
Performing market contribution |
APAC at 44% |
Key countries |
US, China, Japan, India, and Germany |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
ACTIA PCS, Amphenol Communications Solutions, Broadcom Inc., Cadence Design Systems Inc., DASAN Networks Inc., Infineon Technologies AG, Intrepid Control Systems Inc., Keysight Technologies Inc., Marvell Technology Inc., Microchip Technology Inc., Mouser Electronics Inc., NEXCOM International Co. Ltd., NXP Semiconductors NV, Realtek Semiconductor Corp., Rohde and Schwarz GmbH and Co. KG, Spirent Communications Plc, System on Chip Engineering S.L., TE Connectivity Ltd., Tektronix Inc., and Texas Instruments Inc. |
Market dynamics |
Parent market analysis, Market Forecasting, 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 market forecast period |
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. |
We can help! Our analysts can customize this market research report to meet your requirements.
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Vehicle Type
7 Market Segmentation by Application
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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