Automotive Semiconductor Market Size

Automotive Semiconductor Market Analysis

The Automotive Semiconductor Market is expected to register a CAGR of 14.43% during the forecast period.

The automotive semiconductor market size is expected to grow from USD 71.62 billion in 2023 to USD 140.52 billion by 2028, at a CAGR of 14.43 percent during the forecast period (2023-2028). The market was evaluated by analyzing the sizes of components used in the automotive industry, including processors, sensors, memory devices, integrated circuits, and discrete power devices. The report's scope comprises analyzing various vehicle types, like light commercial vehicles, heavy commercial vehicles, and passenger vehicles, around the world.

• A semiconductor is a substance, such as germanium or silicon, with electrical conductivity intermediate between a conductor and an insulator. The application of semiconductors in vehicles ranges from chassis, power electronics safety, body electronics, and comfort or entertainment units.
• Automobiles are an essential element of people's lives because they are the primary form of transportation today. The automotive safety and security system technologies have undergone a significant change in recent years, from seat headrests to adaptive cruise control systems. The rising wave of advanced technologies, such as blind-spot detection, drowsiness monitoring systems, lane departure warning systems, head-up display, night vision systems, park assist, e-call telematics, and tire-pressure-monitoring system technologies, are creating a significant potential for safety and security systems to protect the driver and passengers from severe injuries during a vehicle crash. The increasing adoption of autonomous vehicles is expected to drive the growth of the studied market. For instance, according to Intel, global car sales are estimated to reach more than 101.4 million units in 2030, and autonomous vehicles are anticipated to account for approximately 12 percent of car registrations by 2030.
• A growing number of affordable vehicles feature advanced infotainment, safety, performance, and fuel efficiency. Such features lead to the inclusion of various components, leading to an increase in the price raise of the overall vehicle. Thousands of semiconductor chips are at the core of automobiles today, acting as the vehicle's eyes, ears, and brain, monitoring the environment, making choices, and regulating actions. According to the Semiconductor Industry Association, modern automobiles may have 8,000 or more semiconductor chips and over 100 electronic control units, which account for more than 35 percent of total vehicle cost and are predicted to exceed 50 percent by 2025 to 2030.
• The increase in automotive production is also estimated to offer lucrative opportunities for the studied market. For instance, according to OICA, in 2022, around 85 million automobiles will be produced worldwide. It represents an increase of around 6 percent over the previous year. Further, according to the China Association of Automobile Manufacturers(CAAM), in January 2022, approximately 345,000 commercial vehicles and 2.08 million passenger cars were manufactured in China. The industry, in total, produced 2.42 million vehicles in January 2022.
• Moreover, according to the Society of Motor Manufacturers and Traders, British commercial vehicle production grew by 39.3 percent (as compared to 2021) to 101,600 units in 2022. The output for the domestic market in 2022 rose by 14.0 percent year-on-year to 40,409 units, with 101,600 vans, trucks, taxis, buses, and coaches leaving factory lines. The increased automotive manufacturing activities would aid the growth of the studied market during the forecast period.
• COVID-19 caused an immediate halt in existing manufacturing, impacting supply chains worldwide. China, which was initially afflicted by the pandemic, lost over two-thirds of its vehicle manufacturing due to the statewide lockdown, significantly damaging the supply chain. Auto supply chains are frequently geographically dispersed; with each country imposing its protocol following the pandemic, supply chain management took a significant hit, emerging as one of the most critical challenges confronting the automotive industry during COVID-19.
• The high costs associated with developing and deploying automotive semiconductors are anticipated to significantly restrain the studied market.