What are the Reasons for the Exponential Increase in Demand for Automotive Semiconductors?

Semiconductor devices are omnipresent in every aspect of our daily life, and hence have their applications in consumer electronics such as laptops, mobile phones, computers, telecommunications, automobiles, 5G, cloud computing infrastructure, and many others. Automotive semiconductors have already secured a dominant position as one of the fastest growing segments for the global semiconductor industry. Semiconductor devices are gaining immense popularity nowadays as they are widely used in a number of operations for critical functions like safety, sensing, power management, control, and display of technologically advanced automobiles.

There has been an exponential growth in the demand for consumer electronics, laptops, smartphones, displays, etc. This is due to the increasing dependence on technology and electronics, during the pandemic, where the global workforce gradually and consequently shifted towards remote work environments and secluded quarantines so as to curb the spread of the novel virus. As a result of this, semiconductor manufacturing facilities sequenced the production of chips for pertinent electronics first before those for automotives. But the growing prevalence of cost-effective electric vehicles having low-maintenance and minimal carbon emission perks along with several government initiatives is expected to stimulate the demand for automotive semiconductors across the globe.

According to the report published by Research Dive, the global automotive semiconductor market is anticipated to generate a revenue of $93,696.2 million by 2028, growing expeditiously at a CAGR of 12.2% during the forecast period 2021-2028.

Exemplary Uses of Semiconductors in the Automotive Industry

Semiconductors used in an automobile contribute only a miniscule percent of the total semiconductors produced. They significantly help and act in accordance with the essential qualitative and technical requirements. Vehicle electrification is one of the primary uses of semiconductors that appreciably helps to replace manual systems with electrical systems. The electrification of key systems provides a series of perks such as enhanced vehicle efficiency, decreased oil dependency, and considerable reductions in carbon emissions.

In addition, semiconductors ascertainably help in increasing safety and driver assistance in automobiles. Numerous automobile manufacturers across the globe are increasingly focussing on optimizing safety and driver assistance systems in modern automobiles, which proliferated the need for semiconductors. Integration of semiconductor technologies corroborate the use of smart and safety functions such as adaptive cruise control, airbag deployment, lane change assist, backup cameras, emergency braking systems, and blind-spot detection.

Furthermore, semiconductors play an important role in maintaining connectivity of cars in real-time. Car manufacturers are rapidly implementing innovative technologies to enhance its connectivity. Some of the modern cars have impeccable long-distance data transmission and extremely delightful infotainment capabilities that gives information to drivers on numerous instances like collision avoidance, road closures, availability of free parking spaces, and others. Thus, semiconductors remarkably allow cars to stay put in real-time.

The Way Ahead for Automotive Semiconductors in the Coming Years

Semiconductors have revolutionarily evolved over the past couple of years to reach out its intrinsic use in potentially every aspect of our daily lives due to the rising demand of the customers. As far as the automobile industry is concerned, the demand for semiconductors will subsequently increase with the growing prevalence of automation and sophistication in vehicles, further widening its applications. Not to forget about the prevailing inclinations towards autonomous driving along with electric vehicles, which will further accelerate the technological advancements in the automobile industry. But the COVID-19 pandemic has had a negative impact on the demand for automotive semiconductors due to the largescale closure of numerous semiconductors manufacturing organizations across the globe, in order to curb the spread of the virus during the pandemic. In addition, there was an adverse shortage of raw materials due to the stringent import-export restrictions imposed by various governments across the globe. However, with the eased pandemic-related restrictions, growing demand for electric vehicles, and several initiatives taken by the government, the global demand for automotive semiconductors is expected to surge expeditiously in the coming years.

About the Author(s)

Princy A. J

Princy holds a bachelor’s degree in Civil Engineering from the prestigious Tamil Nadu Dr. M.G.R. University at Chennai, India. After a successful academic record, she pursued her passion for writing. A thorough professional and enthusiastic writer, she enjoys writing on various categories and advancements in the global industries. She plays an instrumental role in writing about current updates, news, blogs, and trends.