Automotive

Semiconductors in automotive
The billion-dollar market

Semiconductors have historically enabled a range of major innovations in the automotive technology, including airbags, passenger safety and application to enhance driving. 

As cars become even more complex, demand for automotive semiconductors in traditional areas such as chassis control, communication and entertainment will continue to rise steadily and provide major long-term growth.

The automotive market now experiences simultaneous disruptions. Recent years new technologies are increasingly incorporated into the mass production of cars such as LED lights, 3-D mapping and EV batteries. 5G networks will soon be available enhancing external communication.

Vehicle electrification
Excluding full hybrids— electric cars (EV) was less than 1 percent of new-vehicle sales in 2016. In 2020, global sales of 2.4 million EV represented 4.2 percent, with EU reaching 6 percent. Strong growth is predicted to occur from 2026 with EV growing from 10 percent and reaching 30 percent in 2032. EV sales in the US, China and Europe is expected to exceed combustion engines (CE) already in 2028.

Increased connectivity
With hands-free mobile and online navigation standard in most vehicles, automotive OEM, original equipment manufacturer, has moved to connected cars. New offerings include telematics services that rely on human–machine interfaces, including voice assistance and eCall, automatic calls to needed emergency services.

Vehicle-to-network and vehicle-to-vehicle connectivity are supported by 5G. OEM offer smart-home service allowing drivers to control domestic heating and lighting from the vehicle. Connectivity strongly influences vehicle-purchase decisions and is expected to have a greater impact in the future. Revenue from connectivity solutions for OEM could rise to more than 60 billion US dollar by 2025.

The growth of autonomous driving, AD
OEMs have introduced advanced-driverassistance-systems features, such as automatic braking and adaptive cruise control. The highly autonomous vehicles (level 4 cars) — are not expected until between 2020 and 2025. One scenario for 2030 suggests that 35 percent of all cars sold will have conditional automation (level 3) and 15 percent will have high automation (level 4).

Shared mobility services
The rapid growth of car-sharing is driving new technologies. The American consultant company McKinsey & Company, forecasts that car-sharing services accounts for 10 percent of vehicle purchases by 2030 — a shift that will require OEMs to invest in new technologies to capture this market. It is envisage that new technologies will require a basis of EV, autonomous driving and connectivity and novel software as well as new semiconductor solutions to provide vehicles fit for multiple users effectively mitigating risk of accidents.

Market assessments
Between 1995 and 2020 the automotive semiconductor market grew from 7 billion US dollars to 40 billion. With this increase, semiconductors represent 15-18 percent of the industry’s total sales. Sales in 2025 are predicted in the 50 billion-to-55-billion-dollar range. Projections indicate an annual increase of 5 percent between 2020 and 2025 —higher than predicted 3-4 percent growth for entire semiconductor sales.
Analysis suggests that revenues for autonomous chips—one important subcategory—are predicted to rise to 29 billion US dollar per year by 2030, representing 350 dollar per vehicle.
This prediction is a major increase, up from 11 billion dollar in 2019.