Global Automotive Semiconductor Market By Component (Analog ICs, Processors, Sensors, Discrete Power Devices, Memory Devices, Other Components), By Vehicle Type (Passenger Vehicles, Commercial Vehicles (Light Commercial Vehicles (LCVs), Heavy Commercial Vehicles (HCVs))), By Application (Infotainment and Telematics, Powertrain, Chassis, Body Electronics, Safety), By Region, and Key Companies - Industry Segment Outlook, Market Assessment, Competition Scenario, Trends and Forecast 2024-2033

Report Overview

The Global Automotive Semiconductor Market size is expected to be worth around USD 123 Billion By 2033, from USD 51 Billion in 2023, growing at a CAGR of 9.2% during the forecast period from 2024 to 2033.

Automotive semiconductors are specialized electronic components used in vehicles to control various functions and systems. These semiconductors are integral to modern automotive electronics, enabling features ranging from basic engine management and safety systems to advanced driver-assistance systems (ADAS) and infotainment. As vehicles become more digital and connected, the role of semiconductors expands, making them critical for electric vehicles (EVs), hybrid systems, and autonomous driving technologies.

The automotive semiconductor market comprises manufacturers and suppliers of electronic chips and components used in vehicles. This market has seen significant growth due to the increasing incorporation of electronics in automotive design and manufacturing. Semiconductors are used in a myriad of applications within the automotive industry, including power management, sensors, microcontrollers, and communication modules.

The market caters to a broad spectrum of automotive needs, aligning closely with trends in vehicle electrification, connectivity, and automation. Demand in the automotive semiconductor market is driven by several factors. The rise of electric vehicles has been a major catalyst, with EVs requiring a higher quantity and variety of semiconductors compared to traditional vehicles.

Additionally, the increasing implementation of advanced safety and convenience features, such as ADAS, connected car technology, and infotainment systems, also boosts semiconductor demand. Regulatory pressures for safer and more efficient vehicles further accelerate the integration of sophisticated electronics in automotive designs.

The growth of the automotive semiconductor market is influenced by technological advancements and industry requirements. The shift towards autonomous vehicles is particularly impactful, requiring complex chips for sensor processing, data analytics, and decision-making functionalities.

Moreover, the push for lower emissions and higher energy efficiency promotes the development of new semiconductor solutions to manage power more effectively in hybrid and electric vehicles. Another significant growth driver is the global expansion of 5G technology, which enhances vehicle connectivity solutions and supports faster data transfer rates, necessitating more robust and capable semiconductors.

Market opportunities in the automotive semiconductor space are vast. The transition towards fully autonomous and connected vehicles opens up new avenues for chip manufacturers to develop specialized, high-performance semiconductors. There’s a growing need for cybersecurity solutions in vehicles, presenting another opportunity for semiconductor innovation.

Additionally, as the automotive industry increasingly moves towards software-defined vehicles, the demand for semiconductors that can support extensive software functionalities and updates over the air (OTA) is rising, offering substantial prospects for growth and expansion in this market.

In 2023, global automobile production exceeded 93 million units, reflecting a 10% increase from the preceding year. This escalation in production is fueling the demand for automotive semiconductors, which are integral to the advanced functionalities of modern vehicles.

The global automotive aftermarket industry is projected to reach approximately USD 1 trillion by 2024, underscoring the sector’s expansive growth. Modern vehicles are increasingly reliant on electronic systems, evidenced by the presence of over 1,200 semiconductor chips per vehicle on average. This number rises to approximately 1,459 chips for new energy vehicles, highlighting the escalating complexity and integration of electronic systems within the automotive sector.

The surge in automotive demand is particularly pronounced for logic chips fabricated on 20nm to 45nm nodes, driven by the need for enhanced computing capabilities within centralized electrical/electronic architectures. This trend is anticipated to alleviate demand pressure on mature node sizes larger than 55nm.

With production numbers projecting an upward trajectory, the automotive industry’s resurgence suggests a positive outlook for the foreseeable future. The industry’s ambitious goal of surpassing 100 million vehicles in annual production is becoming increasingly feasible, signaling robust growth and development within the sector.

Key Takeaways

• The Global Automotive Semiconductor Market is projected to achieve a valuation of approximately USD 123 Billion by 2033, escalating from USD 51 Billion in 2023. This growth represents a Compound Annual Growth Rate (CAGR) of 9.2% during the forecast period from 2024 to 2033.
• In 2023, the Processors segment secured a commanding share of the market, representing over 43.6% of the Automotive Semiconductor Market.
• During the same period, the Passenger Vehicles segment maintained a predominant position within the market, accounting for more than 68.5% of the market share.
• Additionally, the Infotainment and Telematics segment dominated the market in 2023, capturing over 24.9% of the market share.
• Regionally, Asia-Pacific held a leading position in the automotive semiconductor market in 2023, claiming more than 42.6% of the market, with revenues nearing USD 21.7 billion.

Component Analysis

In 2023, the Processors segment held a dominant position in the Automotive Semiconductor Market, capturing more than a 43.6% share. This segment’s leadership is attributed to the critical role that processors play in modern vehicles, which are increasingly reliant on advanced computing power for various functions.

Processors are essential for managing operations across different vehicle systems such as infotainment, navigation, and autonomous driving capabilities. Their ability to efficiently handle multiple tasks simultaneously and support sophisticated algorithms makes them indispensable in today’s automotive industry. The demand for processors is further driven by the ongoing trend towards vehicle electrification and the integration of AI technologies, which require robust computational support.

As vehicles become more connected and autonomous, the complexity of the tasks they must manage increases, necessitating more powerful and efficient processors. This trend is expected to continue as new technologies, such as 5G and advanced driver-assistance systems (ADAS), become standard features in vehicles, thereby sustaining the growth of the Processors segment.

Moreover, the shift towards electric vehicles (EVs) and hybrid electric vehicles (HEVs) places additional demands on processors due to the need for managing power control units, battery management systems, and other critical functions specific to EVs.

As the automotive industry continues to evolve, the role of processors will expand, ensuring their ongoing dominance in the market. Their capability to adapt to new technological advancements and meet the increasing demands for vehicle efficiency and safety is key to their leading position in the automotive semiconductor space.

Vehicle Type Analysis

In 2023, the Passenger Vehicles segment held a dominant market position in the Automotive Semiconductor Market, capturing more than a 68.5% share. This leadership can be largely attributed to the sheer volume of passenger vehicles produced globally, far surpassing that of commercial vehicles.

The increasing integration of advanced electronics in passenger vehicles for enhanced safety, connectivity, and performance has driven the demand for semiconductors. Features like advanced driver-assistance systems (ADAS), infotainment systems, and electrification components are now standard in many models, requiring a wide array of semiconductors to function properly.

The growth in this segment is also supported by the rapid technological advancements and consumer demand for more sophisticated vehicle features. As connectivity and automation become standard expectations, the complexity and number of semiconductors in passenger vehicles continue to rise. This trend is further bolstered by regulatory pressures for improved safety and fuel efficiency, which encourage manufacturers to adopt high-performance semiconductors that enhance vehicle functionality and efficiency.

Furthermore, the rise in electric vehicle (EV) adoption contributes significantly to the dominance of the Passenger Vehicles segment. EVs, which rely heavily on semiconductor devices for battery management and power control, are becoming increasingly popular due to environmental concerns and favorable government policies.

As the global automotive industry shifts towards sustainability and cleaner technologies, the demand for advanced semiconductors in the passenger vehicle sector is expected to grow, ensuring its continued market dominance.

Application Analysis

In 2023, the Infotainment and Telematics segment held a dominant market position in the Automotive Semiconductor Market, capturing more than a 24.9% share. This segment’s leadership is primarily driven by the increasing consumer demand for advanced infotainment systems, which have become key selling points for new vehicles.

These systems offer connectivity, entertainment, and navigation services, which require a significant amount of semiconductors to manage data, display information, and enhance user interaction. The growth of connected car technologies and the integration of smartphones with vehicle systems have further amplified the need for high-performance semiconductors in this segment.

Additionally, the rise of autonomous driving technologies has boosted the importance of telematics, which relies heavily on semiconductors for communication and data exchange between vehicles and networks. Telematics systems provide vital functionalities such as vehicle tracking, real-time traffic updates, emergency warning systems, and remote diagnostics, all of which enhance vehicle safety and efficiency. As more automotive manufacturers aim to integrate these advanced telematic solutions into their vehicles, the demand for semiconductors in this sector continues to grow.

Moreover, regulatory requirements for vehicle safety and emission standards are pushing automotive manufacturers to adopt advanced semiconductor-enabled telematics solutions that can provide continuous monitoring and control of vehicle functions. This regulatory environment, coupled with consumer expectations for seamless connectivity and rich multimedia experiences, ensures the ongoing dominance of the Infotainment and Telematics segment within the automotive semiconductor market.

The segment’s growth is supported by continuous innovations in vehicle technology, including improvements in user interface designs and the integration of AI, which enhance the driving experience and boost the market demand for sophisticated infotainment and telematics systems.

Key Market Segments

Component

• Analog ICs
• Processors
• Sensors
• Discrete Power Devices
• Memory Devices
• Other Components

Vehicle Type

• Passenger Vehicles
• Commercial Vehicles
  • Light Commercial Vehicles (LCVs)
  • Heavy Commercial Vehicles (HCVs)

Application

• Infotainment and Telematics
• Powertrain
• Chassis
• Body Electronics
• Safety

Driver

Increasing Electrification and Advanced Technologies in Vehicles

The automotive semiconductor market is experiencing significant growth, primarily driven by the increasing electrification of vehicles and the integration of advanced technologies such as autonomous driving and advanced driver assistance systems (ADAS). As vehicles become more reliant on electronic systems for enhanced functionality and energy efficiency, the demand for semiconductors, including microprocessors, sensors, and memory chips, continues to rise.

This trend is supported by the automotive industry’s shift towards electric vehicles (EVs), which require a higher semiconductor content compared to traditional combustion engine vehicles. The evolution towards more connected and intelligent vehicles, featuring sophisticated infotainment systems and connectivity solutions, further amplifies this demand​.

Restraint

Supply Chain Disruptions

One of the main restraints facing the automotive semiconductor market is the vulnerability of the supply chain to disruptions. These disruptions can stem from various factors, including geopolitical tensions, trade conflicts, and unexpected global events like pandemics, which impact production and supply logistics.

The semiconductor industry, which requires precise and timely delivery of materials and components, can experience significant setbacks when supply chains are disrupted, leading to delays in automotive production and increased costs. This issue is particularly pronounced given the global nature of the semiconductor supply chain, where raw materials and production capabilities are spread across different continents​.

Opportunity

Autonomous and Connected Vehicle Technologies

The rise of autonomous and connected vehicles presents a major opportunity for the automotive semiconductor market. As vehicles advance towards higher levels of automation, the number of sensors, controllers, connectivity modules, and processing units required significantly increases.

This technological evolution is driving the need for more advanced semiconductors that can handle increased data processing and connectivity tasks, thereby opening new avenues for growth in semiconductor manufacturing. Companies in the sector are poised to benefit from this trend by developing and supplying the high-performance computing chips and advanced sensors needed for these next-generation vehicle systems​.

Challenge

Technological Complexity and Integration

A key challenge in the automotive semiconductor market is managing the increasing complexity and integration of semiconductor components within modern vehicles. As automotive systems become more interconnected and reliant on electronic components, the complexity of design, testing, and manufacturing processes also increases.

This requires significant R&D investments and collaboration across different technological domains, posing challenges in terms of cost, time-to-market, and technical expertise. Additionally, ensuring the reliability and safety of these advanced electronic components, especially in critical applications such as braking systems and autonomous driving, remains a crucial concern for manufacturers​.

Growth Factors

The automotive semiconductor market is experiencing significant growth driven by several key factors. One of the primary growth drivers is the increasing integration of advanced electronics in vehicles, which boosts demand for various semiconductor components like processors, sensors, and memory devices.

The rapid adoption of electric and hybrid vehicles, which rely heavily on power semiconductors for energy management and battery operations, is another crucial factor. Additionally, the development of advanced driver-assistance systems (ADAS) and the push towards autonomous vehicles are propelling the need for more sophisticated and high-performance semiconductors​.

Emerging Trends

Several trends are shaping the future of the automotive semiconductor market. Electrification is a major trend, with a significant shift towards electric vehicles (EVs) requiring advanced semiconductors for power management, battery control, and electric drivetrains. Another key trend is the advancement in autonomous driving technologies, which demands high-performance computing chips and sophisticated sensor systems to support features like adaptive cruise control and automatic parking.

There is also a growing demand for in-car connectivity and enhanced infotainment systems, which require robust semiconductor support for navigation, entertainment, and vehicle-to-everything (V2X) communications. These trends highlight the ongoing transformation and technological advancements within the automotive sector, driven by consumer demands and regulatory requirements for safer, more efficient vehicles​.

Regional Analysis

In 2023, Asia-Pacific held a dominant market position in the automotive semiconductor market, capturing more than a 42.6% share, with revenues reaching approximately USD 21.7 billion. This region leads primarily due to the robust automotive manufacturing base in countries such as China, Japan, and South Korea, which are pivotal in the automotive industry.

The extensive production facilities and advanced manufacturing techniques in these countries have significantly driven the demand for automotive semiconductors, which are essential for modern vehicle electronics and safety systems. The growth in Asia-Pacific is also fueled by the increasing adoption of electric vehicles (EVs), driven by governmental policies supporting environmental sustainability.

For instance, China’s aggressive electric vehicle initiatives and incentives have propelled the development and integration of advanced semiconductors to manage battery management systems, on-board diagnostics, and electronic control units. Additionally, the region’s strong focus on technological innovations, such as autonomous driving and connected car solutions, further amplifies the demand for high-performance semiconductors.

Key Regions and Countries covered іn thе rероrt:

• North America
  • US
  • Canada
  • Mexico
• Europe
  • Germany
  • UK
  • France
  • Italy
  • Russia
  • Spain
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • South Korea
  • India
  • Rest of Asia-Pacific
• South America
  • Brazil
  • Argentina
  • Rest of South America
• Middle East & Africa
  • GCC
  • South Africa
  • Israel
  • Rest of MEA

Key Players Analysis

The automotive semiconductor market is shaped significantly by strategic activities of leading companies, enhancing their market position and technological capabilities. Among the top key players, NXP Semiconductors N.V., Renesas Electronics Corporation, and Infineon Technologies AG stand out due to their impactful strategies.

NXP Semiconductors N.V. has expanded its portfolio through acquisitions that enhance its automotive offerings, such as the acquisition of Marvell’s wireless connectivity assets, bolstering its capabilities in vehicle networking.

Renesas Electronics Corporation has launched new products that integrate advanced semiconductor solutions tailored for automotive applications, emphasizing efficiency and reliability in vehicle electronics.

Infineon Technologies AG has been involved in strategic mergers, such as its merger with Cypress Semiconductor, aimed at broadening its product line and reinforcing its market presence in the automotive sector.

Top Key Players in the Market

• NXP Semiconductors N.V.
• Renesas Electronics Corporation
• STMicroelectronics NV
• Texas Instruments Incorporated
• ON Semiconductor Corporation
• Microchip Technology Inc.
• Analog Devices, Inc.
• Robert Bosch GmbH
• Qualcomm Technologies, Inc.
• Toshiba Corporation
• Infineon Technologies AG
• ROHM Co., Ltd.
• Other Key Players

Report Scope