Bumper year for Automotive semis; Infineon takes the lead

Robust vehicle production growth, together with increased semiconductor content in cars charted a path of 10 percent 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. 2014 Winners 2014 has seen a major change in the automotive supply chain, according to the Competitive Landscaping Tool CLT - Automotive – Q4 2014, now available from IHS Technology. It has been a great year for Infineon, which enjoyed double digit revenue growth. Infineon has a strong presence in Powertrain, Chassis and Safety and Body and Convenience domains. Increased electrification in vehicles has helped its power management solutions, including the micro-component ICs. Infineon, which was lagging more than $500 million behind Renesas in 2013, has now taken the lead over Renesas, who had been leading the market for many years. IHS research indicates this change is largely due to fluctuation rates between the U.S. Dollar and the Japanese Yen, but it does not take into account the acquisition of International Rectifier, which was still in process in 2014. Now that the acquisition is complete, Infineon will further increase its lead over Renesas. International Rectifier’s strong presence in low-power insulated-gate bipolar transistor (IGBT), power modules and power metal-oxide-semiconductor field-effect transistor (MOSFET) arenas will particularly reinforce Infineon’s position in the key growing applications. Based on the IHS analysis, other suppliers and their ranks are as follows: Top Winners among Automotive Semiconductors Suppliers in 2014

Supplier	2014	2013	Key Drivers
Infineon	1	2	Strong growth in Chassis and Safety, Powertrain and Body and Convenience; Infineon’s power management solution benefit from HEV/EVs market
Freescale	4	4	Distinctive presence in fast growing segments such as Infotainment, ADAS and HEV/EVs
TI	5	7	Strong year for TI’s embedded processors especially in ADAS and Infotainment
On Semi	8	8	Increased position in ADAS with acquisition of Aptina’s CMOS imaging sensors
Micron	9	13	Increased its share in memory ICs for infotainment with its DRAM and eMMC solutions