Automotive Semiconductor Market by Component (Processor, Analog IC, Discrete power device, Sensor), Vehicle Type (Passenger Car, LCV, HCV), Fuel Type (Gasoline, Diesel, EV/HEV), Application (Powertrain, Safety, Chassis) - Global Forecast to 2027
Updated on : Oct 23, 2024
Automotive Semiconductor Market Size
Automotive semiconductor market is projected to grow from USD 42.9 billion in 2022 to USD 70.0 billion by 2027, growing at a CAGR of 10.1% during the forecast period from 2022 to 2027.
Automotive Semiconductor Market Share
The semiconductor technology has evolved over the years and has enabled manufacturers of automobiles to bring multiple applications together on a single chip by cutting down the board area, thus optimizing the performance. As a result, one of the major drivers of the automotive industry over the years has been the rise of integrated electronics, and the advancements in the same can be seen to keep the automotive semiconductor industry moving ahead in the coming years.
Rising trend of vehicle electrification and growing demand for advanced safety, convenience, and comfort systems are the main factors driving the growth of semiconductor content in the automobiles. On the other hand, factors such as rising cost of overall vehicle, maintaining balance between cost and quality of the products, and continuous optimization of component size are continuously creating challenges for the automotive semiconductor market.The automotive semiconductor market has been segmented based on component, vehicle type, fuel type, application, and geography. These market segments are further analyzed on the basis of market trends across the four regions considered in this study.
Automotive Semiconductor Market Forecast to 2027
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Automotive Semiconductor Market Dynamics
Driver: Growing shift towards the use of electric and hybrid to reduce vehicle emissions
Motor vehicles not running on fossil fuels, such as electric vehicles, hybrid electric vehicles, solar-powered vehicles are the primary choice for alternate technologies of powering an engine that does not involve petroleum. Increasing the use of electric and hybrid vehicles will help reduce fuel costs of consumers, minimize air pollution due to reduction in greenhouse gases (GHGs), improve air quality in urban areas, and lower dependence on fossil fuels. The adoption of electrified vehicles will lead to a significant rise in demand for new automotive ICs, microprocessors, and sensors.
According to a European Environmental Agency (EEA) report published in October 2022 titled “New registrations of electric vehicles in Europe”, 2021 saw a significant increase in the uptake of electric cars and vans in the EU. Electric car registrations for the year were close to 1,729,000, up from 1,061,000 in 2020. This represents an increase from 10.7% to 17.8% in the share of total new car registrations in just 1 year. The uptake of electric vans also increased, from 2.1% of total new registrations in 2020 to 3.1% in 2021. The number of battery electric and plug-in hybrid cars are comparable in 2021, while battery electric vehicles accounted for the majority of electric van registrations in 2021.
Hence, with the inclusion of advanced technologies and new features in vehicles has increased the scope of electrification. As a result, original equipment manufacturers (OEMs) are installing a greater number of ICs, microprocessors, and sensors in high-end electric vehicles.
Restraint: Increase in the overall cost of motor vehicle
With growing demand & expectations from the consumers and increasing competition between OEMs, innovation has always been an important factor in the automotive industry. Alternatively, regulatory compliance is also a major factor behind the current wave of automotive innovation. Manufacturers are racing to meet higher fuel-efficiency standards, which are rooted in concerns over oil dependency and the environment, especially global warming. Another key factor driving innovation is the increasing number of software-driven electronic components in vehicles today.
These components enable quicker innovations not only in telematics and on-board infotainment but also in features related to vehicle handling, safety, service, reliability, and performance. However, installation of all new safety features, emission control devices, and luxury components, as a result of either consumer demand or regulatory compliance, eventually increases the overall cost of the vehicle. Cost is not the area of concern for premium segment cars but the demand for small and medium segment cars is largely affected by the cost of the vehicle. Every automaker is trying to provide the efficient safety and comfort features that too at a reasonable price. This puts the limitation on the use of semiconductor devices in the vehicle as semiconductor is the key component for these features. This rising cost of the vehicle owing to the increased use of electronics may restrain the growth of the semiconductor market.
Opportunity: Rising environmental concerns driving development of electric vehicles
Environmental problems and need to conserve energy are powerful factors that have advanced the development of HEVs and EVs. Hybrid vehicles are equipped with, in addition to an engine, a motor, a high-voltage high-power battery to drive that motor. Hybrid vehicles fulfil the need for high power requirement whenever necessary, along with the environmental benefits.
Stringency of the emission norms across the globe has resulted in technological advancements in the automotive sector in order to reduce the harmful exhaust emissions from the vehicles. The advent of EVs is one of the most important steps in automotive industry for the environment protection. These vehicles do not use any conventional fuel, thereby do not produce any harmful gases. These all factors have accelerated the growth of the electric car sales, especially in developed regions such as North America and Europe. As these vehicles completely rely on electrical power supply, the use of electronic devices is much more in these vehicles.
Power electronics is a key technology for hybrids and represent 20% of the total cost of a vehicle, giving a lot of scope for semiconductor technology. These new technologies are in the introduction phase and are poised to have a greater impact on the automotive semiconductor market. The rise of HEVs and EVs is likely to be a huge opportunity for automotive semiconductor manufacturers. Governments of many countries such as Germany, US, Denmark, China, France, Sweden, UK, and India among others offer several incentives to promote the electric and hybrid car sales with the country.
Challenge: Safety and security threats in autonomous vehicles
In recent years, autonomous cars have gained traction. There have been multiple fatal incidents in Level 3 to Level 5 autonomous vehicles, wherein the vehicle had limited human interaction. Moreover, the EU Agency for Cybersecurity (ENISA) and Joint Research Centre (JRC) released a report that autonomous vehicles carry serious cybersecurity risks. The report noted that autonomous vehicles are susceptible to adversarial machine learning techniques such as evasion or poisoning attacks. This threat model involves spoofing the pattern and facial recognition systems.
Evasion attacks manipulate the data fed into the systems to alter the output for the attacker’s benefit. Similarly, poisoning attacks corrupt the training process to cause a malfunction benefiting the attacker. For instance, autonomous cars from Tesla that feature autonomous driving operation were tricked into accelerating from 35 to 85 mph with a modified speed limit sign. With the development of advanced sensors such as microprocessors, ICs, radar, LiDAR, and image sensors, OEMs are expected to increase their utilization in autonomous cars. However, OEMs and integrators must focus on ensuring the accuracy, security, and reliability of these sensors. Moreover, manufacturers should adopt the security-by-design approaches to guarantee security on the roads.
Market Interconnections
Analog IC market to account for largest share of the automotive semiconductor market in 2022
In today’s automobiles, electronics are the chief differentiators between the competing automakers. In terms of numbers, automotive electronics per car typically include hundreds of sensors, tens of electronic control units (ECUs) processing systems, miles of cable harnesses, and extensive network systems. Analog ICs are required to assist all these processors, power devices, sensors, and other electronic components of the automobile to perform the task and to transfer the controls instructions and signals from one system to other. Growing electrification of the powertrain segment not only generating a huge demand for power devices but also showcasing the opportunity to supporting analog ICs to grow significantly in the coming years. In the report, under the analog ICs segment, we have also covered the market for logic ICs and the connectivity devices. The analog ICs primarily used in a vehicle are amplifiers, interfaces, converters, comparators, ASIC, ASSP, regulators, drivers, logic ICs, and infotainments, telematics, and connectivity devices.
Automotive semiconductor market for passenger cars is projected to have the highest share during the forecast period
The passenger car is the largest segment with the highest production and demand globally. Passenger cars comprise sedans, hatchbacks, station wagons, sport utility vehicle (SUVs), multi-utility vehicles (MUVs), and vans. This is the most promising market for automotive semiconductor, owing to the fact that this is the largest segment in the automotive industry. Passenger cars continue to be mostly equipped with gasoline-powered engines globally. In China, there is a higher demand for electric powered passenger vehicles compared to the rest of the world. The semiconductor content in electric or hybrid vehicles is more than the normal passenger cars. The major area of semiconductor application in these vehicles is the powertrain. The increasing demand for the electric and hybrid vehicles owing to the growing environmental concerns is the key opportunity for the automotive semiconductor manufacturers.
Telematics and infotainment application to have the highest market share during the forecast period
Telematics & infotainment accounted for the largest share of the automotive semiconductor market based on applications. This growth in telematics & infotainment application can be attributed to the technological advancements in the field of cell phones, internet, and GPS receivers. High accuracy requirements have led to increased demand for systems such as location tracking, job dispatch, and vehicle diagnostics among others. The infotainment and telematics systems in today’s vehicles have multiple capabilities. They are interconnected with one another and with other systems such as GPS and entertainment systems. User peripherals such as short-range wireless devices, mobile phones, and USB devices are also attached to the same internal networks. The telecommunications interfaces can also be used for remote vehicle surveillance, reprogramming of software, system diagnostics, and control of certain vehicle systems through connections with external devices.
APAC is expected to account for a dominant share of the market
The APAC region has emerged as a major automotive hub with majority of the market share in terms of vehicle production as well as sales. The primary reason behind this trend is the growing Chinese automotive market. This market has evolved into the largest producer of vehicles and consequently the largest consumer of automotive semiconductor across the globe. The region is known for small and cost-effective cars. As a result of various reasons such as low production cost, easy availability of economic labor, lenient emission & safety norms, government initiatives for foreign direct investments (FDIs), the region has witnessed higher growth in the past 10 years than the matured markets of Europe and North America. Growing population, accelerating economies (developed as well as developing), and government initiatives to promote industrial growth have made APAC an ideal destination for automobile production units.
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Key Market Players
Major vendors in the automotive semiconductor companies include Robert Bosch (Germany), Continental (Germany), Infineon Technologies (Germany), NXP Semiconductors (Netherlands), Sensata Technologies (US), Borgwarner, (US), Allegro Microsystems (US), DENSO (Japan), Analog Devices (US), ELMOS Semiconductor (Germany), STMicroelectronics (Switzerland), TE Connectivity (Switzerland), Onsemi (US), Renesas Electronics (Japan), ROHM Semiconductor (Japan), Aptiv (Ireland), CTS (US), Autoliv (Sweden), ZF Group (Germany), Quanergy (US), Toshiba (Japan), Magna International (Canada), Melexis (Belgium), Amphenol (US), and Valeo (France).
Automotive Semiconductor Report Scope
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Report Metric |
Details |
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Estimated Market Size |
USD 42.9 Billion |
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Projected Market Size |
USD 70.0 Billion |
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Growth Rate |
CAGR of 10.1% |
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On Demand Data Available |
2030 |
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Forecast period |
2022—2027 |
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Segments covered |
Component, Vehicle Type, Fuel Type, Application, and Geography |
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Geographic regions covered |
North America, Europe, APAC, and RoW |
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Companies covered |
Robert Bosch (Germany), Continental (Germany), Infineon Technologies (Germany), NXP Semiconductors (Netherlands), Sensata Technologies (US), Borgwarner (US), Allegro Microsystems (US), DENSO (Japan), Analog Devices (US), ELMOS Semiconductor (Germany), STMicroelectronics (Switzerland), TE Connectivity (Switzerland), Onsemi (US), Renesas Electronics (Japan), ROHM Semiconductor (Japan), Aptiv (Ireland), CTS (US), Autoliv (Sweden), ZF Group (Germany), Quanergy (US), Toshiba (Japan), Magna International (Canada), Melexis (Belgium), Amphenol (US), and Valeo (France) |
Automotive Semiconductor Market Highlights
This report categorizes the automotive semiconductor market based on component, vehicle type, fuel type, application, and geography.
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Details |
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By Component: |
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By Vehicle Type: |
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By Fuel Type: |
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B Application: |
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B Region: |
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Recent Developments
- In May 2022, Continental (Germany) widened its broad sensor portfolio by launching two new sensors for electrified vehicles: the Current Sensor Module (CSM) and the Battery Impact Detection (BID) system. Both new solutions focus on protecting the battery and/or on battery parameter retention.
- In October 2021, Infineon Technologies (Germany) introduced the SLI37 automotive security controller: an easy-to-design and reliable trust anchor to secure safety-critical automotive applications such as 5G-ready eUICC (eCall), vehicle-to-everything (V2X) communication, car access, or software updates over the air (SOTA) updates.
- In July 2021, NXP Semiconductors (Netherlands) announced a collaboration with Ford to deliver enhanced driver experiences across its global fleet of vehicles, including the 2021 Ford F-150 pickup, Mustang Mach-E and Bronco SUVs. Ford’s new fully networked vehicle architecture will implement NXP’s vehicle networking processors and the i.MX 8 Series processors.
Frequently Asked Questions (FAQ):
What will be the dynamics for the adoption and design of vehicles with increased safety?
Vehicle safety, security, and comfort will gain further momentum in the coming years and will become an important aspect of future mobility technologies as vehicles have become more complex due to the increased installation of electronics and software components. Automotive semiconductor vendors are set to benefit from a surge in demand for various semiconductor devices in cars, including microcontrollers (MCUs), sensors, and memory modules.
How will LiDAR technology affect development towards growth of autonomous vehicles?
LiDAR technology is now being utilized for Level 2 and Level 3 automation in automobiles, with limited deployment. LiDAR technology is set to be utilized in self-driving taxis for ride-sharing services, shuttle services, and on-demand car services. This also includes mobility-on-demand (MOD) fleets, which are operated by ride-share companies such as Uber and Lyft.
How will technological developments in vehicle telematics change the market landscape in the future?
Vehicle-to-vehicle (V2V) and vehicle-to-infrastructure (V2I) communications are the upcoming technologies that are being tested by manufacturers across the globe. In these systems, an equipped vehicle function as a node in a network is able to communicate with other vehicles and roadside units to provide one another with information on such topics as safety warnings and the state of traffic.
In APAC, what measures are being taken by players to cater to the high growth in the region?
OEMs and suppliers have set up production and sales facilities in APAC to cater to the demand of the market. It is also witnessing growth in population and income levels, which are subsequently increasing the demand for automobiles. OEMs in this region are not only catering to local demands but are also serving developed markets through exports. China, Japan, and India are collectively driving the automobile market holding the largest shares of the global market with respect to production and sales.
What are the key factors influencing market growth? How will they turn into strengths or weaknesses of companies operating in the market space?
Governments' support and regulation for sale and development of EVs, as well as limiting the emission from fossil fuel powered vehicles are expected to influence market growth. However, increased tariffs imposed by governments surrounding the import of critical semiconductor components is expected to restrain the market.
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The study involved four major activities in estimating the size for the automotive semiconductor market. Exhaustive secondary research was done to collect information on the market, peer market, and parent market. The next step was to validate these findings, assumptions, and sizing with industry experts across value chains through primary research. The bottom-up approach was employed to estimate the overall market size. After that, market breakdown and data triangulation were used to estimate the market size of segments and subsegments.
Secondary Research
In the secondary research process, various sources were referred to for identifying and collecting information important for this study. Secondary sources include corporate filings (such as annual reports, investor presentations, and financial statements); trade, business, and professional associations; white papers, automotive-related journals, and certified publications; articles by recognized authors; gold and silver standard websites; directories; and databases like Factiva.
Secondary research was mainly conducted to obtain key information about the industry supply chain, the market value chain, the total pool of key players, market classification and segmentation according to industry trends to the bottom-most level, and key developments from both markets- and technology-oriented perspectives. Data from secondary research was collected and analyzed to arrive at the overall market size, which was further validated by primary research.
Primary Research
In the primary research process, various primary sources from the supply and demand sides were interviewed to obtain the qualitative and quantitative information for this report. Primary sources from the supply side include industry experts such as CEOs, VPs, marketing directors, technology and innovation directors, and related key executives from major companies and organizations operating in the automotive semiconductor market.
Extensive primary research was conducted after obtaining information about the automotive semiconductor market through secondary research. Several primary interviews were conducted with market experts from both the demand and supply sides. Primary data has been mainly collected through telephonic interviews, which constitute approximately 80% of the overall primary interviews. Moreover, questionnaires and emails were also used to collect the data.
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Market Size Estimation
In the complete market engineering process, both top-down and bottom-up approaches have been used, along with several data triangulation methods for estimating and forecasting the size of the automotive semiconductor market and its segments and subsegments listed in this report. The key players in the market have been identified through secondary research, and their market share in the respective regions has been determined through primary and secondary research. This entire procedure includes the study of the annual and financial reports of the top market players and extensive interviews of the industry experts, such as chief executive officers, vice presidents, directors, and marketing executives, for key insights.
All percentage shares, splits, and breakdowns have been determined using secondary sources and verified through primary sources. All the possible parameters affecting the markets covered in this research study have been accounted for, viewed in detail, verified through primary research, and analyzed to obtain the final quantitative and qualitative data. This data has been consolidated and supplemented with detailed inputs and analysis from MarketsandMarkets and presented in this report.
Automotive semiconductor Market: Bottom-Up Approach
Data Triangulation
After arriving at the overall size of the automotive semiconductor market from the estimation process explained above, the total market was split into several segments and subsegments. The market breakdown and data triangulation procedures were employed, wherever applicable, to complete the overall market engineering process and arrive at the exact statistics for all segments and subsegments. The data was triangulated by studying various factors and trends from both the demand and supply sides. Along with this, the market size was validated using both the top-down and bottom-up approaches.
Report Objectives
- To describe and forecast the automotive semiconductor market, in terms of value and volume, based on component, vehicle type, fuel type, application, and region
- To describe and forecast the market size, in terms of value, with regard to four main regions: North America, Europe, Asia Pacific, and the Rest of the World (RoW)
- To provide detailed information regarding drivers, restraints, opportunities, and challenges influencing the growth of the market
- To provide a detailed overview of the supply chain of the automotive semiconductor ecosystem
- To strategically analyze micromarkets with respect to individual growth trends, prospects, and contributions to the total market
- To analyze opportunities in the market for various stakeholders by identifying high-growth segments of the market
- To benchmark players within the market using the proprietary “Competitive Leadership Mapping” framework, which analyzes market players on various parameters within the broad categories of market rank and product footprint
- To strategically profile key players and comprehensively analyze their market position in terms of ranking and core competencies, along with detailing the competitive landscape of the market
- To analyze competitive developments, such as acquisitions, product launches and developments, expansions, partnerships, and acquisitions, in the market
Available Customizations
With the given market data, MarketsandMarkets offers customizations according to the specific requirements of companies. The following customization options are available for the report:
Product Analysis
- Detailed analysis and profiling of additional market players
Growth opportunities and latent adjacency in Automotive Semiconductor Market
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