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The Global Automotive Semiconductor Market is predicted to be valued at $160,260.8 million by 2032, surging from $68,375.7 million in 2022, at a CAGR of 9.4%.
The pandemic led to disruptions in global supply chains, including semiconductor manufacturing and distribution. Many semiconductor factories had to temporarily shut down or operate at reduced capacity due to lockdown measures and workforce shortages. This resulted in a shortage of automotive semiconductors, causing production delays and vehicle manufacturing bottlenecks. The pandemic caused a decline in consumer demand for automobiles as people faced financial uncertainties and mobility restrictions. This decline in demand led to reduced orders for automotive semiconductors, impacting the overall automotive semiconductor market size. Automotive manufacturers scaled back production and prioritized essential vehicles, further affecting semiconductor demand.
The rapid evolution of self-driving technology, boosted by breakthroughs in-car sensors and communication technologies, has a direct impact on the automotive semiconductor business. These developments have resulted in improved visibility and awareness, as well as the creation of technologies such as parking assistance, adaptive cruise control, lane-keep assistance, traffic sign recognition, and pedestrian detection. Sensing technologies are critical in facilitating the transition to self-driving automobiles. Cameras, Radio Detection and Ranging (RADAR), Light Detection and Ranging (LiDAR), and, to a lesser extent, ultrasonics are the principal sensor types utilized in autonomous vehicles. To launch completely self-driving autonomous vehicles, highly robust sensing systems for real-time detection, surround-view, and collision avoidance are necessary all around the vehicle. The automotive semiconductor market is predicted to develop dramatically as autonomous driving technologies evolve and expand. Semiconductor manufacturers need to work on cutting-edge technologies capable of handling the complicated requirements of autonomous vehicles, such as high-performance computing, real-time data processing, and robust networking capabilities. These are the major factors anticipated to boost the automotive semiconductor market share during the forecast timeframe.
The major restraint of the automotive semiconductor market is its operational failures in extreme climatic conditions such as extreme cold and extreme heat. In the presence of extreme heat, semiconductors tend to melt down or break, and it makes the signal too weak, which is why failures occur. Furthermore, extreme cold is also not favorable for semiconductors, as they stop performing. Extreme cold temperatures can also adversely affect semiconductor performance. At extremely low temperatures, semiconductors may stop functioning or exhibit reduced performance due to the limited mobility of charge carriers. However, automotive semiconductors are designed to operate at lower temperatures, with a minimum operational temperature typically around -25°C or lower. This allows vehicles to function in cold climates, although additional measures like insulation and heating systems may be necessary.
The integration of Industry 4.0 and the Internet of Things (IoT) into the automotive sector has created significant opportunities for semiconductor companies. As vehicles become more connected and intelligent, the demand for semiconductors that can support various IoT applications and services is on the rise. Moreover, with the advent of connected cars, there is a need for robust IoT connectivity solutions in vehicles. Automotive semiconductors play a crucial role in enabling reliable and secure communication between vehicles and the IoT network. These semiconductors facilitate seamless integration of IoT devices, sensors, and cloud-based services into the automotive environment. Furthermore, the integration of IoT and Industry 4.0 in the automotive sector generates vast amounts of data. Automotive semiconductors with advanced data processing capabilities enable real-time data analytics within vehicles. This enables applications such as predictive maintenance, driver behavior analysis, and intelligent decision-making based on data insights. As features like autonomous driving and blind-spot detection grow more common, the automotive industry will require more chips in the upcoming years.
The automotive semiconductor market is segmented on the basis of component, vehicle type, propulsion type, application, and region.
Component:
The component segment is classified into processor, analog IC, discrete power, sensor, memory, and others. Among these, the sensor sub-segment is anticipated to be the fastest growing during the forecast period. Increased automation of motor vehicles generates the necessity for installation of sensors. Functions such as automatic switching of lights, parking assistance, and fuel level sensing deploys various types of sensors in motor vehicle thereby leading to the growth of the segment in the global market. In addition, the advancement of automated features such as sleep detection, autonomous driving, and others installed in vehicles also drives the growth of sensors in the global market. In the automotive sector, sensors are used for a variety of purposes, including threat detection and alerting, intelligent observation, and mapping traffic.
Vehicle Type:
The vehicle type segment is further classified into passenger car, light commercial vehicle, and heavy commercial vehicle. Among these, the light commercial vehicle sub-segment is projected to witness the highest CAGR during the forecast years. Light commercial vehicles (LCVs) are frequently used by enterprises for a variety of purposes, including delivery services, tradesmen, small businesses, and fleet operations. LCVs may move around more easily in crowded or urban environments than heavy commercial trucks as they are smaller in size. They are made to easily maneuver through loading docks, parking lots, and small streets. LCVs provide customization flexibility to accommodate many types of freight. LCVs include vans, pickups, minitrucks, or specialized vehicles with open cargo beds, enclosed cargo compartments, shelving systems, or refrigerated units. To make loading and unloading activities easier, these could include cargo tie-down points, sliding doors, rear doors, liftgates, or ramps. LCVs prioritize driver comfort and safety while primarily emphasizing commercial utility. They might include amenities like air conditioning, climate control, advanced driver assistance systems (ADAS), and security features like airbags and anti-lock braking (ABS) system.
Propulsion Type:
The propulsion type segment is further classified into internal combustion engine and electric engine. Among these, the electric engine sub-segment is predicted to have the fastest growth during the forecast period. As the popularity of electric vehicles expands throughout the world, so will the quantity of semiconductors utilized in them. In addition, factors such as increase in demand for fuel-efficient, high-performance, and low-emission vehicles along with stringent government rules & regulations toward vehicle emission, are increasing the demand for electric vehicle across the globe. Also, rising fuel costs, increasing environmental concerns, and cheap operating costs of electric automobiles are projected to accelerate the adoption of electric vehicles. All these factors have led to increased adoption of electric vehicles across the globe which in turn is driving the demand for semiconductors as they are widely used in EVs.
Application:
The application segment is further classified into powertrain, safety, body electronics, chassis, and telematics & infotainment. Among these, the telematics & infotainment sub-segment is predicted to have the fastest growth during the forecast period. Rising demand for in-car entertainment and connection features like navigation systems, music and video players, over-the-air upgrades, and smartphone connectivity are driving the segment growth. The increasing global demand for wirelessly connected vehicles makes it easier to find the location of the vehicle in an emergency. All these factors are projected to drive the sub-segment growth in the upcoming years.
Region:
The automotive semiconductor market in Asia-Pacific is projected to show the fastest growth during the forecast period. The advanced features such as power windows, on-steering driver control, infotainment displays with navigation systems, and other such features have increased the demand for automotive semiconductor. In addition, the region comprises a large proportion of world’s population and consists of developing economies with increase in disposable income, which is expected to fuel the demand for automobiles. China's automotive semiconductor market has experienced remarkable growth, driven by the country's status as a global automotive leader and its commitment to electric mobility and advanced technologies. Automotive semiconductors play a vital role in powering and enabling various automotive functions, from electric powertrains and ADAS to infotainment and connectivity. With strong government support, a developing domestic semiconductor industry, and collaborative efforts between automotive semiconductor industry stakeholders, China is well-positioned in the future of automotive semiconductors, driving innovation and transforming the automotive industry in the process. Furthermore, the increased use of advanced driver-assistance technologies, as well as hybrid and electric vehicles, has boosted the regional automotive semiconductor market growth.
Some of the leading automotive semiconductor market players are
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