Automotive market supports ailing semiconductor industry

November 10, 2015 // By Christoph Hammerschmidt
In its upcoming IC Market Drivers Report, market research company IC Insights breaks down chip demand by market segments. According to the report, the automotive industry’s demand shows the strongest growth of all industry branches while traditional demand boosters like computer and consumer markets only show anaemic growth. With its disproportionally high growth, Asia / Pacific will surpass Europe as the largest automotive chip market.

During the timeframe from 2014 through 2019, chip demand from the automotive industry is growing at an average pace of 6.7% per year predicts IC Insights. Thus, semiconductor demand from carmakers across the world will be greater than two points more than the CAGR of the overall chip industry which is estimated to be about 4.3 %.

The market watchers broke down the entire chip industry by six segments: Automotive, Computer, Consumer, Communications, government/military and industrial/medical. The strong demand growth from the automotive industry is owed to the fact that this market is growing from a smaller base compared to all other market segments save government/military and industrial/medical. Other factors keeping chip demand from this industry high is the sharply rising semiconductor content of increasingly connected and automated. In addition, demand from the automotive industry is relatively steady compared to other industries as a consequence of the long design and production cycles for cars.

According to IC Insights, the computation load of next-generation advanced driver assistance systems (ADAS) jumps very quickly with every attempt to widen the sensing range, boost detection precision, and execute more powerful algorithms to respond quickly and effectively to many different driving conditions.

In 2015, IC Insights estimates that automotive IC sales will represent 7.3% of the total $287.1 billion IC market. Yet, despite growing at a faster annual rate than other end-use segments, automotive IC sales are not forecast to account for much more of the total IC market than they do today. In 2019, the automotive IC market is forecast to represent 8.1% of the total $358.7 billion IC market. Falling average selling prices continue to offset steady unit growth, particularly among automotive analog, MCU, and special purpose logic devices. This effect has mitigated bigger gains in auto’s share of the total IC market.

Other highlights about the automotive IC market revealed in the new 2016 IC Market Drivers Report include the following:

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