The automotive semiconductor market did exceptionally well in 2014, according to new analysis from IHS. Robust vehicle production growth, together with increased semiconductor content in cars charted a path of 10% growth year over year to reach $29B in 2014. IHS reports the fastest growing segments for automotive semiconductors are hybrid electric vehicles, telematics and connectivity and advanced driver assistance systems (ADAS).
The semiconductor revenue in these applications is forecast to achieve a compound annual growth rate (CAGR 2013–2018) of 20 percent, 19 percent and 18 percent respectively. The outlook for 2015 is also promising and the automotive semiconductor market is forecast to reach $31B, a strong 7.5 percent improvement over 2014.
Main growth drivers
Emissions legislations are leading semiconductor take rates in powertrain applications in regions around the world.
“The new concepts in emissions mitigation in the engine and in exhaust aftertreatment systems require advance sensors for their operation, said Ahad Buksh, analyst, automotive semiconductors, at IHS. “For example, a hybrid electric vehicle demands ten times more semiconductor content in powertrain,” he said.
Some of the key semiconductor applications for these vehicles include: a motor inverter is needed to convert the direct current to alternating current and vice versa, DC/DC converter is needed for bidirectional voltage control, battery management system is needed to monitor the state of the battery and plug-in charger required for charging the battery. All these applications require high-power management which will be achieved mainly with analog integrated circuits (ICs) and discrete components. After 24 percent growth in 2014, this segment is forecast to increase 22 percent in 2015, the highest of any automotive application.
Safety mandates and guidelines are driving the adoption of ADAS technology. Because of the encouragement of regional authorities and regulators for better safety standards, OEMs are increasingly adopting ADAS applications such as Lane Departure Warning (LDW), Forward Collision Warning (FCW) and Automatic Emergency Braking (AEB), among other technologies. These applications are being implemented with a front view camera module besides radar and lidar modules, providing high potential for semiconductor growth. A higher processing power (DMIPS) in micro-component ICs, increased non-volatile memory for image storage and increased volatile memory for execution of image processing functions would be required for these applications. The semiconductor market for ADAS technology is expected to reach $1.8B in 2015, a 21 percent increase over 2014.
The infotainment domain also provides strong growth opportunities for the future. An important trend in head-units is the high-definition video function. It primarily comes from the adoption of consumer and mobile devices. This is also reflected in the incredible growth of the consumer electronic suppliers in the automotive industry, including nVidia, which is estimated to have grown more than 80 percent in 2014.
The next five years are extremely important for telematics and broadband technology as well. 4G LTE technology will continue to grow in 2015, marking an inflection point toward sunset on 2G and 2.5G solutions in years to come. In the instrument cluster, the trend is moving from conventional analog to hybrid and fully digital instrument clusters. At the moment, the premium OEMs are going for a digital approach for their high-end vehicles, but in the long run, having digital instrument clusters in all the vehicles could be an option as well.