© begemot 30 Analysis | May 10, 2016

Automotive electronics system demand fails to boost

With discussion increasingly focused on autonomous vehicles and vehicle-to-vehicle (V2V) and vehicle-to-infrastructure (V2I) communication, demand is rising for electronic systems to support new, intelligent cars.
Meanwhile, older, existing technology on high-end vehicles continues to migrate down to mid-range and low-end cars and technology-based aftermarket products are gaining momentum.

Given all the new electronic systems that have been added to automobiles in recent years, one might reason that this segment accounts for a large share of the total global electronic system sales. That’s simply not the case. On a worldwide basis, automotive electronics represented only 8.9% of the USD 1.42 trillion total 2015 worldwide electronic systems market, a slight increase from 8.6 percent in 2014.

Automotive’s share of global electronic system production has increased only incrementally and is forecast to show only slight gains through 2019, when automotive electronics are forecast to account for 9.4 percent of global electronic systems sales. Despite the many new electronics systems that are being added in new vehicles, IC Insights believes pricing pressures on automotive ICs and electronic systems will prevent the automotive end-use application from accounting for much more than its current share of total electronic systems sales through 2019.

Falling average selling prices in these three segments have largely offset unit growth over the past few years. In 2015, falling ASPs led to a 3 percent decline in the automotive IC market to USD 20.5 billion. Based on IC Insights’ forecast, the automotive IC market will return to growth in 2016, increasing 4.9 percent to USD 21.5 billion, as currency exchange rates stabilize and additional electronic systems (such as backup cameras) become mandatory equipment on new cars sold in the U.S.

The automotive IC market is now forecast to reach USD 28.0 billion in 2019, which represents average annual growth of 5.8 percent from USD 21.1 billion in 2014. Based on IC Insights’ forecast, the 2019 automotive IC market will be 2.6x the size it was in 2009 when the market was only USD 10.6 billion—its low-point during the great recession.

Analog ICs and MCUs together accounted for 74 percent of the estimated USD 20.5 billion automotive IC market in 2015. Demand for automotive MCUs continues to expand as more vehicles are designed with embedded computer systems to address safety and efficiency issues demanded from legislators and consumers. As cars get smarter and more connected, demand is growing for memory and storage to support a wide array of applications, particularly those that require quick boot up times as soon as the driver turns the ignition key.

DRAM and flash memory, which receive considerable attention in computing, consumer, and communication applications, are currently much less visible in the automotive IC market but memory ICs are expected to account for 12.0 percent of the 2019 automotive IC market, an increase from 7.8 percent in 2015.


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