Comparing the industrial and consumer market, the automotive industry is a relatively small segment in the IC market. The share of automotive-specific ICs is expected to account for only 8% of the total market in 2015 .
However, this small segment market is looking at a bright future with a 10.8% CAGR (Compound Annual Growth Rate) from 2013 to 2018, way ahead of the total IC market CAGR of 5.5% . In 2014 alone, the total value of the automotive IC market reached $21.7 billion .
The tremendous growth rate of the automotive IC market is due to the trend towards electric or hybrid cars and safety enhance applications.
The global demand for electric or hybrid vehicles is being driven from the increase in environmental awareness, emissions legislation, government encouragement policy, and the increased industry focus on power efficiency. In 2014, the sales of plug-in vehicles, referring to both hybrid and electronic cars, in America, increased 23% from 2013 . The first half of 2015, E.U. experienced a 55% growth in plug-in vehicle sales . Although plug-in vehicles still account for only a tiny portion of the total automobile industry, the increasing sales of those vehicles lift the demand for electronic components as a plug- in car demands 10 times more semiconductor content in its powertrain . Almost all the key applications, such as voltage control, direct current, and battery management in plug-in cars require high power management , which is made possible by various applications IC and discrete components. Power management ICs are also needed in charging stations for electronic cars.
Another area driving up the demand is the adoption of advanced driver assistance systems (ADAS) in vehicles across the market. The desire for greater safety and better overall driving experience is pushing the OEMs in automotive industry to incorporate ADAS applications such as Lane Departure Warning (LDW), Forward Collision Warning (FCW), and Automotive Emergency Braking (AEB), in their designs . As a result, the demand for front view camera modules, high processing power ICs (32-bit MCU), and non-volatile memory for image storage is expected to increase, creating high potential growth for such components in the semiconductor segment . Additionally, the developing trend for driver-less cars or smart cars is generating a demand for advanced sensors, powerful processors, and sophisticated connectors.
The changing trends in the automotive industry also reflect the changes in the electronic component manufactures. In 2014, Infineon took the leading position within the automotive semiconductor suppliers through their strong presence in safety and power management solutions . The acquisition of International Rectifier this year also gives Infineon advantages in the market. The merger between NXP and Freescale will create the largest automotive semiconductor manufacturer including a dominant position within automotive RF, high performance mix signals, MOSFET, and power management . With other manufactures looking at this growing segment, the IC market for the automotive industry is expected to see advanced technology, efficient manufacture, and competitive pricing .
To be successful and stay ahead the curve in such a competitive and changing IC market, Advanced MP Technology’s purchasing and product teams with in-depth industry experience and knowledge of different segments across the IC market will be an big asset for EMSs and OEMs in the automobile industry to source electronic component.