Jul
20
Automotive Semiconductor Market Dynamics
The automotive semiconductor industry is poised for transformative growth driven by electrification, advanced driver-assistance systems (ADAS), and autonomous technologies. This sector is rapidly evolving, with increasing demand for microcontrollers, sensors, and processors, as vehicles integrate more sophisticated electronics. Over the next decade, automotive semiconductors are anticipated to emerge as one of the most rapidly expanding segments within the global semiconductor market.
Market Forecast and Industry Trends
According to McKinsey, the semiconductor market is expected to exceed $1 trillion by 2030, with automotive applications driving a substantial portion of this growth. The automotive semiconductor sector alone could reach $150 billion, reflecting a robust annual growth rate of 13% starting from 2021. This surge is fueled by the rising adoption of electric vehicles and advancements in autonomous driving technologies.
Evolving Demand and Market Shifts
The demand for automotive semiconductors has increasingly diverged from traditional car production volumes. For instance, between 2019 and 2022, while car production saw a decline of 7% due to pandemic-related disruptions, semiconductor sales surged by 47%. This shift underscores the growing importance of semiconductors in modern vehicles, as they become integral to various functionalities including safety, infotainment, and electric propulsion.
Growth in Semiconductor Content Per Vehicle
The average vehicle currently incorporates about $350 worth of semiconductor components, predominantly in microcontrollers and power electronics. In contrast, hybrid and luxury vehicles see this number nearly double, reflecting the heightened complexity of their systems. Looking ahead, the semiconductor content in electric vehicles is projected to rise significantly, with expectations for this value to grow from $1,000 today to $1,500 by 2027.
Leading Companies in Automotive Semiconductors
Focusing on key players in the automotive semiconductor market, ON Semiconductor (ON) and Infineon (OTCQX) stand out for their substantial contributions. ON Semiconductor, in particular, is well-positioned with its strategic focus on silicon carbide technology, essential for the future of EVs. Infineon also plays a crucial role, with significant investments aimed at advancing automotive semiconductor applications.
Investment Insights and Market Opportunities
ON Semiconductor is actively expanding its silicon carbide portfolio, with expectations to achieve $1 billion in sales by year-end. The company has recently secured substantial long-term supply agreements and is enhancing its market position through strategic partnerships. For investors, ON Semiconductor represents a strong growth opportunity, particularly given its focused investments in high-demand automotive technologies.