Automotive Chip Market

Car Chip Market Research, 2031

The global automotive chip market size was valued at $49.8 billion in 2021, and is projected to reach $121.3 billion by 2031, growing at a CAGR of 9.6% from 2022 to 2031.

An automotive chip is an electronic component that is designed and manufactured for use in automobiles. It is a semiconductor chip used for various applications, such as engine control, transmission control, infotainment systems, and advanced driver assistance systems (ADAS) in vehicles. It is used to control and monitor various functions, such as engine performance, fuel consumption, braking, and steering in a vehicle. It is also used to enhance the driver's experience and provide features such as GPS navigation, Bluetooth connectivity, and music streaming. The automotive chip market refers to the production and sale of electronic chips that are used in various components of automobiles, such as sensors, control units, powertrain systems, and infotainment systems. These chips are critical for the functioning of modern vehicles, as they enable the transmission and processing of data between various systems and components.

The global automotive chip market is a rapidly growing sector that has seen significant growth due to advancements in technology and changes in consumer preferences. These chips are typically designed to withstand the harsh operating conditions in a vehicle, such as high temperatures, vibration, and electromagnetic interference. Automotive chips are available in several types, including microcontrollers, sensors, analog ICs, logic ICs, and memory chips, and are used for various applications, such as powertrain control, safety systems, and communication systems. The COVID-19 pandemic has caused disruptions and challenges for the car market chip shortage, with supply chain issues and fluctuating demand causing uncertainty and delays. Therefore, development of advanced automotive chips has been crucial in the development of electric and autonomous vehicles, as well as the integration of advanced safety and connectivity features in modern cars. 

The global automotive chip market share is expected to experience significant growth due to an increase in demand for Advanced driving assistance system (ADAS), surge in demand for electric vehicles, and rise in demand for autonomous driving. However, the complexity of design and high manufacturing costs hamper the growth of the market. On the contrary, increased focus on cybersecurity, and increase in demand for connected cars are the major factors expected to provide lucrative opportunities for market growth during the forecast period.

The automotive chip market is segmented into product, application, propulsion type, and region. By product, the market is classified into microcontrollers, logic ICs, sensors, analog ICs, and others. By application, it is bifurcated into powertrain, body electronics, safety systems, chassis, and telematics & infotainment systems. By propulsion type, it is segregated into ICE vehicles, and electric vehicles. Region-wise, the market is analysed across North America, Europe, Asia-Pacific, and LAMEA.

The key players profiled in this automotive chip market report include Analog Devices, Inc., Infineon Technologies AG, NVIDIA Corporation, NXP Semiconductors, Renesas Electronics Corporation, Robert Bosch GmbH, ROHM CO., LTD, STMICRO Electronics, Texas Instruments Incorporated, and TOSHIBA CORPORATION.

Increase in demand for advanced driving assistance system (ADAS)

ADAS requires a wide range of chips, sensors, and processors to work together to provide features such as collision detection and avoidance, lane departure warning, and adaptive cruise control. These features are gaining popularity among consumers due to the added safety benefits they provide. This, in turn, increases the demand for ADAS systems. The automotive chip market is experiencing significant growth as automakers are incorporating more sophisticated electronics into their vehicles. For instance, in January 2021, NXP Semiconductors announced the release of a new radar sensor for ADAS applications, called the S32R294. The chip is designed to enable high-resolution radar imaging, which can be used for various ADAS applications.

The automotive chip market includes microcontrollers, memory chips, sensors, and other components that are used in various automotive applications. In addition to ADAS, other factors driving the growth of the automotive chip industry include increase in use of electric vehicles, connected cars, and the Internet of Things (IoT) in the automotive industry. These trends are also driving the need for advanced chips and sensors to enable features such as remote diagnostics, predictive maintenance, and real-time data analysis. Thus, the demand for ADAS is a significant growth driver in the market of automotive chip, and this trend is expected to continue in the coming years as automakers continue to innovate and integrate advanced electronics into their vehicle..

Growing demand of electric vehicles

There is an increase in demand for electric vehicles (EVs), and these vehicles require a wide range of chips, including power management chips, battery management systems, and charging solutions. As automakers aim to reduce their carbon footprint and comply with emission regulations, they are shifting toward the development of electric and hybrid vehicles. These vehicles require more sophisticated electronics and control systems, which are powered by automotive chips. For instance, in September 2021, NXP Semiconductors announced that it developed a new chip that can be used to improve the efficiency of electric vehicle powertrains. The chip, called the S32K3, is designed to help EVs run more efficiently, which can help extend their range.

The surge in popularity of electric vehicles (EVs) is expected to significantly increase the demand for automotive chips during the forecast period. As countries around the world work toward reducing their carbon emissions and combating climate change, there has been a significant shift towards EVs, which are seen as a cleaner and more sustainable alternative to traditional gasoline-powered vehicles. Furthermore, the increase in demand for automotive chips in the EV market is the need to manage and control the flow of electricity throughout the vehicle. EVs rely on a complex system of batteries, power electronics, and electric motors to operate, and all these systems require advanced automotive chips to control and manage the flow of electricity. Thus, surge in demand for automotive chips is projected to further drive the growth of the automotive chip market.

Complexity of design

The design of automotive chips is a complex process that requires a high level of expertise and knowledge. Automotive chips must meet strict specifications and performance requirements to ensure reliable and safe operation in vehicles. It must meet stringent functional safety requirements to ensure that they operate reliably and safely in a vehicle. Designing chips for functional safety requires a deep understanding of automotive safety standards and regulations. Furthermore, it is designed to consume as little power as possible to maximize battery life and improve fuel efficiency. Achieving low power consumption requires a prominent level of design optimization and expertise. Also, automotive chips must be designed to operate in extreme temperatures, humidity levels, and vibration environments. Designing for these environmental factors requires specialized knowledge and testing. Moreover, it must be compatible with a range of other electronic components in the vehicle, including sensors, control units, and communication systems. Ensuring compatibility requires careful coordination and testing. Thus, complexity in designing automotive chips may impede the growth of the automotive chip market.

Increased focus on cybersecurity

The risk of cybersecurity threats in the automotive industry has increased with the rise in use of connected devices and autonomous vehicles. Automotive chips play a crucial role in ensuring the cybersecurity of these vehicles, as they control the communication and data exchange between various components of the vehicle. Automakers and chip manufacturers are increasingly focusing on developing advanced and secure automotive chips to ensure the safety and security of connected and autonomous vehicles.

This has led to the development of innovative technologies such as hardware-based security, encryption, and secure booting, which are being incorporated into automotive chips. In recent years, there have been several instances of cyber-attacks on vehicles, which have led to concerns about the safety and security of connected and autonomous vehicles. For instance, in 2015, a group of researchers demonstrated that they could remotely take control of a Jeep Cherokee through its infotainment system, highlighting the vulnerability of connected vehicles to cyber-attacks.

To address these concerns, automotive chip manufacturers are working with automakers to develop advanced and secure automotive chips. For instance, in January 2020, NXP Semiconductors announced the launch of its new S32G2 vehicle network processors, which are designed to provide enhanced cybersecurity features for connected vehicles. Thus, the increase in focus on cybersecurity in the automotive industry is likely to further drive the demand for automotive chips, as automakers and chip manufacturers work to develop advanced and secure technologies for connected and autonomous vehicles. This automotive chip market update creates an opportunity for chip manufacturers to develop solutions that can help protect vehicles from cyber threats.

The COVID-19 pandemic has caused disruptions and challenges for the automotive chip shortage, with supply chain issues and fluctuating demand causing uncertainty and delays. However, the automotive chip market is expected to recover and continue to grow in the long term, with the increasing demand for electric and autonomous vehicles.

Key Benefits For Stakeholders

• This report provides a quantitative analysis of the market segments, current trends, estimations, and dynamics of the automotive chip market analysis from 2021 to 2031 to identify the prevailing automotive chip market opportunities.
• The market research is offered along with information related to key drivers, restraints, and opportunities.
• Porter's five forces analysis highlights the potency of buyers and suppliers to enable stakeholders make profit-oriented business decisions and strengthen their supplier-buyer network.
• In-depth analysis of the automotive chip market segmentation assists to determine the prevailing market opportunities.
• Major countries in each region are mapped according to their revenue contribution to the global market.
• Market player positioning facilitates benchmarking and provides a clear understanding of the present position of the market players.
• The report includes the analysis of the regional as well as global automotive chip market trends, key players, market segments, application areas, and market growth strategies.

 Automotive Chip Market Report Highlights