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The automotive IC market is estimated to grow at a CAGR of 8.84% between 2022 and 2027. The size of the market is forecast to increase by USD 16.86 billion. The growth of the market depends on several factors, including the dropping price of ICs, increasing demand for electronics in the vehicle, and growing demand for powertrain systems that require sensors, microcontrollers, and analog converters.
This report extensively covers market segmentation by type (discrete, logic, micro components, analog, and others), vehicle type (passenger cars and commercial vehicles), and geography (APAC, Europe, North America, South America, and the Middle East and Africa). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.
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The dropping price of ICs and increasing demand for electronics in the vehicle are driving the growth although factors such as complexity in design are impeding the growth. 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.
Key Automotive IC Market Driver
The dropping price of ICs and increasing demand for electronics in vehicles is shaping the market. Electrification of the drivetrain, vehicle intelligence (such as active safety innovations and connectivity-enhanced driving), and consumerization of auto electronics are the major factors fostering the growth of the automotive semiconductor market. The demand for electronic components in the drivetrain is increasing due to the adoption of hybrid and EVs, making the drivetrain the largest segment for automotive semiconductor usage. The drivetrain is expected to account for almost 30% of the overall IC used in the automotive industry.
Toyota has focused on and highlighted fast switching rate and efficiency by using semiconductors such as isolated gate bipolar transistors (IGBT) and power metal-oxide-semiconductor field-effect transistors (MOSFETs). Hybrid and electric vehicles have a huge opportunity in the IC market during the forecast period. The electric drivetrain changes substantially in each vehicle generation. The design of the drivetrain is still evolving with pure EVs. EVs with internal combustion engine charging and internal combustion engine assistance are competing for market share and will be the option for the next dominant engine type.
Significant Automotive IC Market Trend
The potential demand for EVs is the major driver shaping the global market. In the last few years, EVs have gone from being novelty products to serious contenders. The primary reasons are tremendous torque, power on demand, low maintenance, and a greener and cleaner environment. In EV, electric engines are vastly more efficient, delivering upward of 90% efficiency as compared with 30% of internal combustion engines (ICE). A push toward green vehicles that run on electricity and/or another power source, such as solar, wind, and biofuels, is a major solution to fuel emissions that help reduce greenhouse gas (GHG) emission levels in the atmosphere to an acceptable level. Countries across the world have come up with stringent emission norms to reduce the cause of global warming to an extent.
Efforts are being made by governments worldwide to minimize the adverse effects of global warming and reduce GHG emissions. For instance, the EU norms of 2009 set the CO2 emission level for new passenger cars as 130g/Km. The target is to reach 95 grams of CO2 per kilometre by 2022. In the last few years, battery density has doubled and is expected to double again in the next few years, thereby driving the sales of EVs.
MajorAutomotive IC Market Challenge
Complexity in design is one of the major challenges for the market. Generally, microprocessors contain many transistors and lengthy copper lines. Additionally, the transistors should be highly reliable. The design chain of these materials is much more complex than those of mobile phones or electronic home appliances, such as televisions and remote controllers. This makes the designing of highly reliable ICs a difficult task. ICs must also have high dependability as their replacement is highly expensive and incur huge amounts, thus affecting the vehicle price.
The features and functionality of any new designs should be able to work under the harsh environment and internal complexities of the vehicle. Over-design of the IC may also lead to problems. Vehicle sub-components designed with excessive performance margins will make the product expensive. If an IC fails or a chip is detected as the root cause of the issue, the cost of recall exceeds the revenue budget of an automotive. OEMs need to ensure a high level of reliability and should focus on reliability tests such as the six-sigma design and zero-defect design to avoid IC failure. Such factors will pose a challenge for the market during the forecast period.
The market share growth by the discrete segment is significant during the forecast period. Discrete ICs in automotive include sensors such as micro-electro-mechanical system (MEMS), which has torque, force, pressure, accelerometer, and proximity sensor. Sensors have shown exponential growth in the last few years.
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The discrete segment was valued at USD 7.38 billion in 2017 and continued to grow until 2021. Discrete ICs in automotive include sensors such as micro-electro-mechanical system (MEMS), which has torque, force, pressure, accelerometer, and proximity sensor. Sensors have shown exponential growth in the last few years. The demand for smart sensors is increasing in the automotive industry. Smart sensors provide more accurate and reliable data without being affected by environmental factors. They form an integral part of the current IoT ecosystem, which is crucial in connected vehicles.
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APAC is estimated to contribute 48% to the growth of the global market during the forecast period. Technavio’s analysts have explained the regional trends and drivers that shape the market during the forecast period. The potential market and economic growth of emerging countries such as China and India are boosting the number of market opportunities for vehicles and attracting global automobile manufacturers to this region. Global players are investing significantly in the production and R and D of new technologies and are contributing to market growth. Japan, China, and India are the key countries in APAC that are leading the market in terms of vehicle demand.
This report forecasts the contribution of all the segments to the growth of the market. In addition, we have included the COVID-19 impact and the recovery strategies for each segment. With the lifting of lockdowns in the second half of 2020, due to the initiation of vaccination programs across APAC, manufacturing and retail activities peaked steadily in the region. This is expected to drive the demand for automotive IC from the automotive industry for various applications during the forecast period. Moreover, the automotive industry in APAC, especially in India and China, is expected to grow significantly during the forecast period.
The report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global Automotive IC Market Customer Landscape
Vendors 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.
KLA Corp.- KLA Corp. is a public company headquartered in US. Its revenue from the global automotive IC market contributes to its overall revenues along with its other offerings, but it is not a key revenue stream for the company. Under the semiconductor process control segment, the company looks after the activities of comprehensive portfolio inspection, metrology and data analytics products, and related services.
The report also includes detailed analyses of the competitive landscape of the market and information about 15 market vendors, including:
Qualitative and quantitative analysis of vendors 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 vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.
The reports categorize the global automotive IC market as a part of the global automotive components and accessories market. The global automotive components and accessories market covers companies that produce parts and accessories for automobiles like passenger cars, electric vehicles (EVs), commercial vehicles (CVs), heavy-duty vehicles, off-road vehicles, motorcycles, scooters, quad bikes, and three-wheelers. Our research report has extensively covered external factors influencing the parent market growth during the forecast period.
The report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027. The market has been segmented by Type (Discrete, Logic, Micro components, Analog, and Others), Vehicle Type (Passenger cars and Commercial vehicles), and Geography (APAC, Europe, North America, South America, and Middle East and Africa).
Automotive IC Market Scope |
|
Report Coverage |
Details |
Page number |
178 |
Base year |
2022 |
Historic period |
2017-2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 8.84% |
Market growth 2023-2027 |
USD 16.86 billion |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
8.61 |
Regional analysis |
APAC, Europe, North America, South America, and Middle East and Africa |
Performing market contribution |
APAC at 48% |
Key countries |
US, China, Japan, Germany, and UK |
Competitive landscape |
Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks |
Key companies profiled |
Allegro MicroSystems Inc., Infineon Technologies AG, Intel Corp., KLA Corp., Microchip Technology Inc., Micron Technology Inc., NXP Semiconductors NV, ON Semiconductor Corp, Power Clinic Inc., Renesas Electronics Corp., Robert Bosch GmbH, ROHM Co. Ltd., Samsung Electronics Co. Ltd., Siemens AG, STMicroelectronics NV, Texas Instruments Inc., Toshiba Corp., Wanxiang Group Corp., Analog Devices Inc., and Qualcomm Inc. |
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 |
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. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Type
7 Market Segmentation by Vehicle Type
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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