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Automotive Semiconductor Market to Continue to Grow Through 2009

http://www.electronics.ca/presscenter/articles/87/1/Automotive-Semiconductor-Market-to-Continue-to-Grow-Through-2009/Page1.html

By Electronics.ca Research Network
Published on 04/15/2005

According to a new report, World Automotive Semiconductor Markets , the $16 plus billion worldwide automotive semiconductors business in 2004 will rise at an AAGR (average annual growth rate) of 9% through 2009 to nearly $25 billion. Automotive semiconductor market growth will continue despite slowing auto sales and production.


World Automotive Semiconductor Markets

Automotive electronics are major criteria of differentiation in the automotive market. Car manufacturers use chips in increasing numbers to develop powerful electronic systems for driver information and communication, in-car entertainment electronics, power train and body control electronics as well as automotive safety and convenience electronics. By the end of this year, one quarter of the value of the average car will be comprised of electrical and electronics components; half of which will be semiconductors. Maximizing business opportunities in the automotive semiconductor arena is a challenging task. The desperate efforts of companies to safeguard margins along the industry value chain have dramatically changed the pattern of competition.

According to a new report, World Automotive Semiconductor Markets from BCC Research Group, the $16 plus billion worldwide automotive semiconductors business in 2004 will rise at an AAGR (average annual growth rate) of 9% through 2009 to nearly $25 billion. Automotive semiconductor market growth will continue despite slowing auto sales and production.

Five primary areas are expected to drive growth in automotive semiconductors over the next five years. They include:

  • Further reducing emissions while improving on efficiency;
  • Implementing mechatronics;
  • The transition of conventional mechanical systems to microcomputer controls;
  • Expanding personalization features, such as navigation and communication systems; and
  • Increasing convenience and comfort features; and supplying the growing demand for vehicles in emerging countries.

Of those five, personalizing the vehicle represents the greatest potential for increasing the number of semiconductors in automotives. Personalization features, which address safety, navigation, and information gathering and display, have a powerful impact on buyers. This makes them important to automakers looking for ways of differentiating and adding value to their products, especially now when the market is seeing shrinking profits, weakening growth, heightened competition and increasing commoditization of the auto. Integrating advanced electronic cars take on even greater importance in the future as automakers strive to maintain or increase their share in an aggressive market. Automotive safety represents a growing and the most stable market for semiconductors due to the influence from national governments, consumers and the automakers themselves.

Because electronics traditionally has been the leading technology for solving problems and satisfying consumer needs, automakers are looking for ways to speed the deployment and lower the cost of new semiconductor-based features. And there are some steps auto companies and the semiconductor industry can take to satisfy their business needs while also taking care of consumers. These include closer cooperation between system developers and semiconductor companies; industry-wide adoption of software standards; and protecting intellectual property by using advances in "gateway" microcontrollers.

In terms of semiconductor product segments, micro IC's will show highest AAGR of 10.9% through the forecast period, followed by memory IC's at an AAGR of 9.6%. It is recognized that DRAM and microprocessors products share the technology leadership role and are the principal drivers for the automotive semiconductor usage. In future automotive electronics circuits, there will be a need for accurate, closed-loop, real-time control, necessitating the processing of large volumes of data from multiple sensors. This would demand significant signal processing based computation to determine the required control action. Also there is a shift from systems that rely on look-up table data to model-based platform. This is attributed to the need to meet increasingly rigorous performance requirements. Fuel injection control, for example, draws on multiple data points, including manifold pressure, battery voltage, engine speed, throttle position and exhaust gas oxygen content. In 2004 both these product segments had combined business of $9.65 billion. Among ICs, logic ICs come in third place with an AAGR of 6.7% due to growing usage of application specified integrated circuits (ASICs) in automotive electronic circuits.

In terms of value, MOS micro ICs and MOS memory are the two largest IC product segments in the estimated 2004 global automotive semiconductor market. Continuing this trend through 2009, it is estimated 63% of all IC dollars will be spent in these two categories. The ongoing demand for higher processing power and more memory in automotives will continue to make MOS micro-components the largest IC product segments of the overall market through 2009. It is estimated that MOS microcontrollers (MCUs) and MOS microprocessors (MPUs) will top the list showing demand of $8.75 billion in 2009.

In terms of applications, ICs will show highest usage growth trend in safety (10.4%), followed by body and chassis, each with AAGRs of 9.8%. In central command applications the AAGR of ICs is predicted at 8.7%. This is attributed to the need to meet increasingly rigorous use of infotainment in cars.

Global Market of Automotive Semiconductor by Product Segments, Through 2009
($ Billions)
IC Product Segments

2002

2003

2004

2009

AAGR%
2004-2009

Micro ICs, Memory IC's, Logic IC's 8.32 9.63 11.12 17.79

9.9

Analog and Mixed Signals 2.17 2.46 2.76 3.74

6.3

Discrete and Optoelectronics 1.80 2.08 2.39 3.45

7.6

Total 12.29 14.17 16.27 24.98

9.0

Source: BCC Research Group

Global Market of Automotive Semiconductor by Product Segments, 2002-2004 and 2009
($ Billions)
Source: BCC Research Group

Details of the new report, table of contents and ordering information can be found on Electronics.ca Publications' web site. View the report: World Automotive Semiconductor Markets