Rising appetite for chips in the automotive industry

November 04, 2016 // By Christoph Hammerschmidt
With cars being increasingly connected and driving functions automated, the automotive industry’s appetite for semiconductors is rising quickly. According to preliminary figures from market researcher IC Insights, the demand for chips for automotive electronic systems will display the strongest growth rate of all industry segments for the period through 2020.

IC Insights distinguishes six main electronic system categories: Automotive, Communications, Consumer, Government and Military, Computer. In addition, the industrial and medical categories are combined with “others”.

The take rates of safety features are high in the favor of the customers, if they are not mandatory anyway. Also convenience systems are among those consumers expect for their vehicles. Among the most desired systems are automatic emergency braking, lane departure warning, blind spot monitoring, and backup cameras. All these features are requiring high numbers of sensors, analog ICs and MCUs.

Although the automotive segment is forecast to be the fastest growing electronic system market through 2020, its share of the total IC market was only 7.9% in 2016 and is forecast to remain less than 10% throughout the forecast period.

Other findings:

  • Industrial/Medical/Other electronic systems are forecast to enjoy the second-fastest growth rate (4.3%) through 2020 as wearable health devices, home health diagnostics, robotics, and systems promoting the Internet of Things help drive growth in this segment.  Analog ICs are forecast to hold 49% of the industrial/medical/other IC market in 2016.
  • Communications became the largest end-use market for ICs in 2013, surpassing the computer IC market.  Asia-Pacific is forecast to represent 67% of the total communications IC market in 2016; 70% in 2020.
  • The consumer electronics system market is forecast to display 2.8% CAGR through 2020.  The logic segment is forecast to be the largest consumer IC market throughout the forecast.  In total, the consumer IC market is expected to register a 2.3% CAGR through this same time period.
  • The worldwide government/military IC market is forecast to be $2.5 billion in 2016, but represent only 0.8% of the total IC market ($290.0 billion).  The Americas region is the largest regional market for military ICs, accounting for 63% of the worldwide military IC market this year.
  • Hit by slowing demand for personal computing devices (desktops, notebooks, tablets), the market for computer systems is