Automotive semiconductormarket is anticipated to grow at a significant CAGR of 14.9% during the forecast period (2024-2031). The market growth is attributed to the growing demand for microcontrollers, digital signal processors, application-specific integrated circuits, electric control units, automotive sensors, and MEMS (micro-electro-mechanical systems) in the automotive industry globally driving the growth of the market.According to the Semiconductor Industry Association (SIA), in March 2024, the automotive industry continues to be an important sector propelling semiconductor demand throughout the decade.The current generation of cars, including EVs, can have between 1,000 – 3,500 semiconductors. This number is expected to grow as consumers continue to prioritize advancements in vehicle safety systems (like advanced driver assistance systems (ADAS)), vehicle connectivity, and electrification.

Market Dynamics

Increasing Demand for Vehicle Electrification and Lightweighting

The increasing demand for vehicle electrification and lightweight include semiconductor solutions for power electronics that contribute to energy conversion and efficient energy management.The wide range of power semiconductor devices and technologies with constant improvements in both their electro-thermal characteristics and their packages.The automotive lightweight trends, being driven by sustainability, cost, and performance, that create the enormous demand for lightweight materials and design concepts, are assessed as a part of the circular economy solutions in modern mobility and transportation.Power-efficient new materials such as gallium nitride (GaN) and silicon carbide (SiC) have surpassed the high-power applications required for electric vehicles (EVs).

Advanced Driver Assistance Systems (ADAS)

Advanced driver assistance systems (ADAS) enable safe, automated, and autonomous driving to make transportation safer for all road users. Increasing levels of driving automation require system solutions that enable highly predictable, accurate, and real-time responses. This drives demand for specialized semiconductor components for image processing, radar, LiDAR, and ultrasonic sensors.Various types of ADAS sensors include cameras, radar, LiDAR, sonar/ultrasonic, and more, each serving specific functions. Camera sensors play a significant role in ADAS, detecting objects on the road and enabling features like adaptive cruise control and lane departure warning.

Market Segmentation

Our in-depth analysis of the global automotive semiconductor market includes the following segments bycomponent,vehicle type, and application.

• Based oncomponents, the market is sub-segmented intoprocessor analog IC, discrete power device, sensor, memory, and lighting devices.

• Based on vehicle type,the market is sub-segmented into passenger cars, LCVs, and HCVs.

• Based on application,the market is sub-segmented into  powertrain, safety, body electronics, chassis, telematics, and infotainment.

Discrete Power Device is Projected to Emerge as the Largest Segment

Based on thecomponents,the global automotive semiconductor market is sub-segmented into processor analog IC, discrete power device, sensor, memory, and lighting device.Among thesediscrete power devices,the sub-segment is expected to hold the largest share of the market. The primary factor supporting the segment's growth includesincreaseddemand fordiscrete power devicesin electric vehiclesto offer lower energy loss, higher operating temperatures, and faster switching speeds than conventional silicon power semiconductors. Furthermore, discrete power devicesenablecustomers to deliver highenergy-efficient products in the industrial and automotive. For instance, in November 2023,Mitsubishi Electric Corp., partnered with Nexperia B.V. to jointly develop silicon carbide (SiC) power semiconductors for the power electronics market. Mitsubishi Electric leveragesits wide-bandgap semiconductor technologies to develop and supply SiC MOSFET chips that Nexperia usesto develop SiC discrete devices.

Body Electronics Sub-segment to Hold a Considerable Market Share

Based on application,the global automotive semiconductormarket is sub-segmented intopowertrain, safety, body electronics, chassis, telematics, and infotainment.Among these, the body electronics sub-segment is expected to holdaconsiderable share of the market.The segmental growth is attributed to the increasing demand for comfort and convenience features, such as power windows, electric seats, and climate control systems, automakers are incorporating more body electronics in their vehicles.For instance, in March 2021, Nexperia and United Automotive Electronic Systems Co., Ltd. partnered withGallium Nitride to address the technical requirements for the power systems in electric vehicles body. The electrification of cars, the increasing high power requirements of telecommunication equipment for 5G, and the rise of Industry 4.0 require power conversion efficiencies for which GaN is expected to become the mainstream technology.

The application markets for semiconductor demand globally in 2022

Source: Semiconductor Industry Association, 2022

Regional Outlook

The globalautomotive semiconductor market is further segmented based on geography including North America (the US, and Canada), Europe (UK, Italy, Spain, Germany, France, and the Rest of Europe), Asia-Pacific (India, China, Japan, South Korea, and Rest of Asia-Pacific), and the Rest of the World (the Middle East & Africa, and Latin America). 

Increasing Adoption of Automotive Semiconductorin Asia-Pacific

• In emerging like China and India, the use of automotive semiconductorsis rapidly utilized to control, regulate, and protect electrical systems in vehicles.

• In July 2022, the Ministry of Economy, Trade and Industry (METI), launched the automotive semiconductor supply chain working group with domestic automobile manufacturers including Isuzu Motors, Kawasaki Motors, Suzuki, SUBARU, Daihatsu Motor Corp., Toyota Motor Corp., Nissan Motor Corp., Hino Motors, Honda Motor Corp., Mazda, Mitsubishi Motors, Mitsubishi Fuso Truck and Bus, Yamaha Motor Corp., UD Trucks approach to making automotive supply chains resilient and efforts to guarantee a stable supply of automotive semiconductors.

Global Automotive Semiconductor Market Growth by Region 2024-2031

North America Holds Major Market Share

Among all the regions, North America holds a significant share owing to numerous prominent companies and automotive semiconductor providersin the region. The growth is mainly attributed to the growing development of autonomous driving technology, increasing connectivity in vehiclessuch as in-car infotainment systems contribute the regional growth. Governments are implementing investment programs to encourage semiconductor manufacturing, which is expected to boost the growth of the automotive semiconductor market.According to the National Institute of Standards and Technology (NIST), in February 2024, the U.S. Department of Commerce and GlobalFoundries (GF) signed a non-binding preliminary memorandum of terms (PMT) to provide approximately $1.5 billion in direct funding under the CHIPS and Science Act to strengthen U.S. domestic supply chain resilience, bolster US competitiveness in current-generation and mature-node (C&M) semiconductor production. The modernization of GF’s US manufacturing sites in New York and Vermont, which produce essential automotive, communications, and defense semiconductor technologies.  

Market Players Outlook

*Note: Major Players Sorted in No Particular Order.

The major companies serving the global automotive semiconductormarket include Intel Corp., Mitsubishi Electric Corp., NVIDIA Corp., Renesas Electronics Corp., and Toshiba Corp., among others. The market players are increasingly focusing on business expansion and product development by applying strategies such as collaborations, mergers, and acquisitions to stay competitive in the market. For instance, in February 2024, Infineon and Honda entereda strategic collaboration and signeda MoU to collaborate on automotive semiconductor solutions. The two companies also agreed to continue discussions on supply stability, as well as to encourage transferring mutual knowledge and collaborating on projects aimed at accelerating the time to market of technologies.

Recent Development

• In June 2023, Nidec Corp., and Renesas Electronics Corp., partnered to develop semiconductor solutions for a next-generation E-Axle (X-in-1 system) that integrates an EV drive motor and power electronics for electric vehicles (EVs). EV manufacturers in advanced markets such as China have developed an X-in-1 platform that integrates multiple functions, accelerating the adoption ofmany vehicle models.

• In May 2022, Hitachi Energy launched RoadPak, a power semiconductor module globally for all types of electric vehicles. RoadPak sets a new benchmark in electric vehicle performance. This compact module uses state-of-the-art silicon carbide (SiC) technology to achieve exceptional levels of power density for faster charging, and reliability over the vehicle’s lifetime.

• In July 2022, SEMI Taiwan launched the SEMI Auto IC Master, a comprehensive guide to automotive semiconductor and component providers in Taiwan. Designed to enable closer collaboration among carmakers, automobile Tier 1 suppliers, and Taiwan’s semiconductor IDM and fabless companies, the guide promises to help automakers better adapt production capacity to semiconductor supply chain disruptions and drive innovation.

The Report Covers

• Market value data analysis of 2023 and forecast to 2031.
• Annualized market revenues ($ million) for each market segment.
• Country-wise analysis of major geographical regions.
• Key companies operating in the global automotive semiconductor market. Based on the availability of data, information related to new product launches, and relevant news is also available in the report.
• Analysis of business strategies by identifying the key market segments positioned for strong growth in the future.
• Analysis of market-entry and market expansion strategies.
• Competitive strategies by identifying ‘who-stands-where’ in the market.