What are the major factors driving the growth of the automotive semiconductor market?

In the year 2025, the industry size of automotive semiconductor is evaluated at USD 50.64 billion. Read More

Automotive Semiconductor Market Trends

Growth Drivers

Rising Installation Advanced Driver Assistance System (ADAS) - Semiconductors play a crucial role in a variety of functions in modern automobiles, including safety. Owing to several road accidents nowadays the demand for safety features in automobiles is rising. One of the most important safety features is an advanced driver assistance system that can detect paths on both sides of vehicles and can alert the driver about road conditions. The surge in the installation of the Advanced Driver Assistance Systems (ADAS) is expected to boost the automotive semiconductor market in the forecasted period. It was found that ADAS features were installed in 10% of the 1 billion cars worldwide in 2020.
Increasing Research & Development (R&D) Expenditure – Growing research and development activities in the field of automotive semiconductor is anticipated to drive the market in the future times. For instance, USD 136 billion was spent globally on R&D in the automotive sector in 2020.
Growing Semiconductor Manufacturing Industry – It was found that the complex manufacturing process of semiconductor chips was around USD 500 billion industry. The public is asking for more luxurious and comfortable vehicles for their transport around the globe. This led to the expansion of the semiconductor manufacturing industries. Semi-luxury and luxury cars solely depend on semiconductor technology owing to the manufacturing of semiconductors is rising.
Increasing Connectivity in Vehicles –In the coming years, most automobiles will be connected and 5G networks are going to be next-generation mobility solutions that will offer ample growth opportunities for the market. It is estimated that between 2020 and 2025, there will be 80 million new connected cars in the United States and 27% of new vehicles will have 5G by 2025.

Challenges

Shortage of Semiconductor Chips – The automobile industry currently problem in the shortage of semiconductor chips. As a result, to covid-19 pandemic, many countries implemented a full pandemic owing to which the supply of semiconductor chips was shortened. Though it’s been three years since the pandemic hit the world, the crisis is still on and there is a shortage of semiconductor chips. Without semiconductor chips, vehicles cannot be manufactured.

Need of Huge Capital Expenditure
Fluctuation in the Availability & Prices of Raw Material

Automotive Semiconductors Market: Key Insights

Growth Drivers

Rising Installation Advanced Driver Assistance System (ADAS) - semiconductors play a crucial role for a variety of functions in modern automobiles, including safety. The surge in the installation of Advanced Driver Assistance System (ADAS) is expected to boost the automotive semiconductor market in the forecasted period. It was found that ADAS features were installed in ~10% of the 1 billion cars worldwide in 2020.
Increasing Research & Development (R&D) Expenditure – for instance, ~USD 136 billion was spent globally on R&D in the automotive sector in 2020.
Growing Semiconductor Manufacturing Industry – it was found that the complex manufacturing process of semiconductor chips was around a USD 500 billion industry.
Increasing Connectivity in Vehicles – it is estimated that between 2020 and 2025, there will be ~80 million new connected cars in United States and 27% of new vehicles will have 5G by 2025.
Growing Penetration of Global Positioning Systems (GPS)- for instance, over 75 million cars have a GPS system, and around 98% of cars will have them in the next few years.

Challenges

Shortages of Semiconductor Chip
Need of Huge Capital Expenditure
Fluctuation in the Availability & Prices of Raw Material

The global automotive semiconductor market is segmented and analyzed for demand and supply by propulsion type into electric and internal combustion engine. Amongst these segments, the electric segment is anticipated to garner the largest revenue by the end of 2033, backed by the growing number of electric vehicles along with the surge in the demand for electric cars worldwide. For instance, it is projected that globally, 1 in 2 cars will have an electric powertrain by 2030.

Base Year	2024
Forecast Year	2025-2037
CAGR	8.3%
Base Year Market Size (2024)	USD 47.45 billion
Forecast Year Market Size (2037)	USD 129.32 billion
Regional Scope	North America (U.S., and Canada) Latin America (Mexico, Argentina, Rest of Latin America) Asia-Pacific (Japan, China, India, Indonesia, Malaysia, Australia, Rest of Asia-Pacific) Europe (U.K., Germany, France, Italy, Spain, Russia, NORDIC, Rest of Europe) Middle East and Africa (Israel, GCC North Africa, South Africa, Rest of the Middle East and Africa)

What are the factors driving the automotive semiconductor landscape?

The automotive semiconductor market size was over USD 47.45 billion in 2024 and is anticipated to exceed USD 129.32 billion by the end of 2037, growing at over 8.3% CAGR during the forecast period i.e., between 2025-2037. Upsurge in the number of semiconductor chips in modern vehicles, as well as an increasing number of connected vehicles along with the rising sale of EVs, will propel the market growth.

Who are the key players in the automotive semiconductor sector?

The major players in the market include Infineon Technologies AG, NXP Semiconductors N.V., Robert Bosch GmbH, Analog Devices, Inc., Micron Technology, Inc., Semiconductor Components Industries, LLC, Renesas Electronics Corporation, Rohm Co., Ltd., STMicroelectronics International N.V., Texas Instruments Incorporated.

Automotive Semiconductor Market Trends