Automotive Semiconductor Market Size, Share & Trends Analysis Report By Component (Processor, Sensor, Memory), By Vehicle Type (Passenger Vehicle, LCV, HCV), By Application, By Region, And Segment Forecasts, 2021 - 2028

Report Overview

The global automotive semiconductor market size was valued at USD 41.78 billion in 2020 and is expected to expand at a compound annual growth rate (CAGR) of 6.2% from 2021 to 2028. Increasing demand for electronic content per car is expected to bolster the market growth over the forecast period. Furthermore, increasing penetration of electronic components in luxury to mass-produced cars is also expected to lead to steady market growth over the next few years. The other factors contributing to the market growth include the proliferation of connected cars, infotainment systems, automotive safety systems, and fuel efficiency standards.

Three key trends-namely, autonomy, electrification, and connected mobility-are expected to emerge as major revenue drivers. These trends will play a pivotal role in driving the demand for electronic content per car, subsequently driving the demand for semiconductors in the automotive space. For decades, ICE or internal combustion engine-driven cars have been the primary source of innovation in the automotive space. However, with the growing adoption of autonomy and electrification in the automotive industry, the demand for high-tech cars with improved functionality, backed by semiconductors and chips, is expected to gain momentum.

According to the World Health Organization, approximately 1.24 million individuals die as a result of road traffic crashes each year. If this situation persists, road traffic crashes would become the seventh leading cause of death by 2030. This has triggered an increased focus on the prevention of accidents through the implementation of active safety measures. As a result, active safety features are increasingly being integrated into vehicles to help avoid collisions and accidents. Amongst the vehicle safety provisions, crash avoidance technology, including automatic emergency braking systems for passenger vehicles, is set to remain a standard feature for a majority of the new vehicles produced from 2022 to 2023. Thus, with the rise in the adoption of vehicle safety systems, the market for automotive semiconductors is expected to grow significantly over the forecast period.

The outbreak of the COVID-19 pandemic and the consequent measures undertaken to control the infection rate created significant business volatility, which negatively impacted industries worldwide. Various industries have witnessed a major setback due to the pandemic, including the automobile semiconductor industry. Sales of semiconductors for automotive applications mainly depend on the vehicle sales volume and the level of vehicle electrification and digitization. Due to the outbreak of the COVID-19 pandemic, there has been a sharp decline in automotive sales. The deteriorating sales of passenger and commercial vehicles negatively impacted the automotive semiconductor market growth. Moreover, the electric vehicle industry also faced delays in production and raw material supplies due to looming delays in international export and import shipments.

Component Insights

Based on components, the market is segmented into the processor, discrete power, sensor, memory, and others. In 2020, the other component segment, which includes analog ICs and logic ICs, accounted for the largest revenue share of around 30% and is expected to expand at a CAGR of over 3.0% over the forecast period. The demand for semiconductors in the automotive industry extends across all component types. These components help enhance vehicle electrification, connectivity and shared mobility services. The automotive chip, which is integrated into the vehicle, notifies the driver with a warning and helps take the correct actions in the case of an accident or a crash. Logic ICs are highly used in navigation and infotainment systems. Furthermore, ultra-luxurious vehicles have a more advanced in-vehicle infotainment system and as the sale of ultra-luxurious vehicles is increasing, the demand for logic ICs is expected to increase in the forthcoming years.

The discrete power, memory, processor, and sensor segments are anticipated to play key roles in driving the market growth. The discrete power segment is expected to witness the fastest growth over the forecast period. The memory devices segment is projected to emerge as the second-fastest growing component segment. This growth can be mainly attributed to the ongoing electrification of the major applications of automobiles such as powertrain, which is creating more demand for power components such as IGBT and MOSFET. The need for better safety and advanced features in vehicles is creating the need for more memory devices per vehicle to program various control systems into an autonomous system.

Vehicle Type Insights

The passenger vehicles segment accounted for the largest market share of over 65% in 2020 and is expected to continue leading the market throughout the forecast period. This growth can be attributed to the high demand for passenger cars across the globe. Moreover, increasing the installation of automotive infotainment systems in passenger cars for hands-free phone connectivity and providing navigational services, climate control, voice control, parking assistance, two-way communication tools, and access to the internet is further stimulating the segment growth.

The light commercial vehicle segment is expected to expand at a CAGR of 4.6% over the forecast period, providing a huge scope to the global growth of the market. Rapid urbanization, improvements in road infrastructure, regulatory policies for buying commercial vehicles, and growth of mining and e-commerce activities are expected to drive the growth of light and heavy commercial vehicles over the next eight years.

Application Insights

The body electronics segment accounted for the highest share of around 24% in 2020 and is expected to expand at a CAGR of over 4.0% from 2021 to 2028. The fastest-growing applications involving the consumption of semiconductors in a vehicle are telematics and infotainment, powertrain, and safety. The telematics & infotainment segment is projected to register the highest CAGR of more than 9.0% over the forecast period and is anticipated to hold the highest share by the end of the forecast period.

The increasing competition to provide better comfort and convenience to their customers is encouraging automobile manufacturers to use more semiconductor components for telematics and infotainment and safety applications. Moreover, stringent regulations and standards are generating more demand for semiconductor components in safety and powertrain applications, thereby driving the growth of the market.

Regional Insights

The Asia Pacific region dominated the global market. The region accounted for a market share of over 40% in 2020. The region is likely to emerge as the fastest-growing market over the forecast period owing to the growth of the automotive industry, especially in emerging economies such as India, China, and Japan. In Asia Pacific, China led the market in 2020 and is expected to continue to dominate throughout the forecast period. Moreover, the growing e-commerce industry in the region is anticipated to surge the demand for commercial vehicles in the coming years.

Europe is projected to register the second-highest CAGR of over 5.3% over the forecast period. The growing demand for electric vehicles is likely to fuel the market growth in Europe. Automobile manufacturers are continuously focusing on designing, innovating, and developing autonomous vehicles, which have drawn a considerable percentage of customers in major automotive manufacturing countries. Owing to the consumers' attraction and demand for smart and fully autonomous cars, semiconductors are projected to become an essential part of the innovations in the automotive industry in the coming years.

Key Companies & Market Share Insights

The market is moderately consolidated, with the presence of several global as well as regional players. In 2020, the market was dominated by Infineon Technologies AG, NXP Semiconductors, Renesas Electronics Corporation, Texas Instrument Incorporated, and STMicroelectronics.Organic growth remains the key strategy for the overall industry. The players in the market are focusing on product launches to expand product offerings and meet consumer demands. For instance, in November 2020, NXP Semiconductors developed the S32K3 microcontroller (MCU) family, the new addition to its S32K product line. The new S32K3 family was designed for emerging zone controllers, battery management, and automotive body electronics. It simplified software development with an enhanced package that covered low-level drivers, security, and functional safety.

Market players also focus on acquisition to expand product offerings and presence across the untapped market. For instance, in April 2020, Infineon Technologies AG acquired a semiconductor design and manufacturing company named Cypress Semiconductor Corporation to strengthen its focus on structural growth drivers and expand its microcontrollers, high-performance memories, connectivity components, and software ecosystems portfolios. Some of the prominent players operating in the global automotive semiconductor market are:

• Analog Devices, Inc.

• Infineon Technologies AG

• NXP Semiconductors

• Renesas Electronics Corporation

• Robert Bosch GmbH

• ROHM CO., LTD.

• Semiconductor Components Industries, LLC

• STMicroelectronics

• Texas Instruments Incorporated

• TOSHIBA CORPORATION

Automotive Semiconductor Market Report Scope

Segments Covered in the Report

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2017 to 2028. For this study, Grand View Research has segmented the global automotive semiconductor market report based on component, vehicle type, application, and region:

• Component Outlook (Revenue, USD Million, 2017 - 2028)

  • Processor

  • Discrete Power

  • Sensor

  • Memory

  • Others

• Vehicle Type Outlook (Revenue, USD Million, 2017 - 2028)

  • Passenger Vehicle

  • Light Commercial Vehicle (LCV)

  • Heavy Commercial (HCV)

• Application Outlook (Revenue, USD Million, 2017 - 2028)

  • Chassis

  • Powertrain

  • Safety

  • Telematics & Infotainment

  • Body Electronics

• Regional Outlook (Revenue, USD Million, 2017 - 2028)

  • North America

    • U.S.

    • Canada

  • Europe

    • U.K.

    • Germany

    • Rest of Europe

  • Asia Pacific

    • China

    • India

    • Japan

    • Rest of Asia Pacific

  • Latin America

    • Brazil

    • Mexico

    • Rest of Latin America

  • Middle East & Africa (MEA)