Automotive Semiconductor Market Size - By Component (Processor, Analog IC, Power Discrete, Sensor, Memory), By Vehicle Type (Passenger Car, Light Commercial Vehicle, Heavy Commercial Vehicle), By Propulsion Type, By Application & Forecast, 2024-2032

Automotive Semiconductor Market Size

Automotive Semiconductor Market size was valued at USD 69.3 billion in 2023 and is anticipated to register a CAGR of over 11% between 2024 and 2032. The surge in EV adoption is a primary driver of the market. As governments worldwide implement stringent emissions regulations and offer incentives for EV purchases, automakers are rapidly expanding their EV portfolios. This transition demands high-performance power semiconductors, battery management systems, and various control units.
 

The increasing number of EVs on the road amplifies the need for efficient energy consumption, safety features, and smart charging solutions, all reliant on sophisticated semiconductor technologies. For instance, according to IEA, in 2023, global electric vehicle (EV) sales reached nearly 14 million units, marking a 35% increase from the previous year. This surge brought the total number of electric cars on the road to approximately 40 million. Notably, electric cars represented about 18% of all new car sales globally, up from 14% in 2022.
 

Autonomous driving advancements are a significant driver of the automotive semiconductor market. Self-driving vehicles, from fully autonomous cars to those with advanced driver-assistance systems (ADAS), rely heavily on a multitude of semiconductor technologies to process and analyze vast amounts of data in real-time. To function autonomously, vehicles must gather and process data from various sensors, including cameras, radar, LiDAR, and ultrasonic sensors. These sensors feed information into powerful onboard computers equipped with advanced semiconductors. These semiconductors handle complex algorithms and artificial intelligence (AI) tasks required for real-time decision-making.
 

For example, in August 2024, ams OSRAM introduced an innovative 8-channel laser module specifically designed for autonomous driving applications. This new laser is a significant advancement in LiDAR technology, enhancing the performance and reliability of long-range LiDAR systems. The 8-channel laser module represents a significant step forward in the development of reliable and efficient LiDAR systems for autonomous driving, promising improved safety and functionality in future vehicles.
 

The automotive semiconductor market faces significant challenges due to supply chain disruptions. The COVID-19 pandemic exposed vulnerabilities in global supply chains, causing severe shortages and delays. Semiconductor manufacturers struggle to meet the soaring demand from the automotive sector, exacerbated by the industry's reliance on just-in-time manufacturing.
 

Recent geopolitical tensions, such as trade restrictions between the US and China, have further strained the supply chain. These disruptions have led to production halts for major automakers, emphasizing the need for a more resilient and diversified supply chain strategy. Companies are now exploring local manufacturing and strategic partnerships to mitigate future risks.
 

Automotive Semiconductor Market Trends

The integration of 5G technology into vehicles is revolutionizing the automotive semiconductor industry. 5G offers ultra-fast data transfer rates, low latency, and enhanced connectivity, which are crucial for autonomous driving, vehicle-to-everything (V2X) communication, and advanced infotainment systems. Automakers are collaborating with telecom companies to develop 5G-enabled vehicles, enhancing real-time data processing and communication capabilities.
 

For instance, in February 2024, Verizon Business and Audi of America have announced a significant partnership to integrate 5G connectivity into Audi's U.S. vehicle lineup, starting with select models for the 2024 model year. This collaboration marks Verizon's inaugural agreement with a global premium automaker to implement 5G-enabled automobiles, enhancing Audi's technological capabilities in the automotive sector.
 

AI and machine learning are becoming integral to automotive innovation, driving demand for advanced semiconductors. These technologies enable predictive maintenance, autonomous driving, and personalized in-car experiences. For example, AI-driven audio processing in automotive infotainment systems. This advancement not only addresses the growing demand for high-quality, adaptive audio solutions but also signifies a shift towards more intelligent, software-defined vehicles.
 

As AI continues to integrate into various vehicles systems, the automotive semiconductor market is poised for continued growth and innovation in this space. For instance, in June 2024, NXP Semiconductors introduced its latest family of audio digital signal processors (DSPs), the SAF9xxx series, designed specifically for automotive applications with capabilities in artificial intelligence (AI) and machine learning (ML). This new technology aims to meet the growing demand for advanced audio processing in software-defined vehicles (SDVs).       
     

Automotive Semiconductor Market Analysis

Based on component, the market is segmented into processor, analog IC, power discrete, sensor, memory, and others. In 2023, the processor segment accounted for the largest market share with over 27% of the market share.
 

• The processor segment of the automotive semiconductor market dominated the largest market share due to the increasing complexity and computational demands of modern automotive systems. Processors are integral for managing advanced driver-assistance systems (ADAS), infotainment, and autonomous driving technologies. Their role in handling complex algorithms and real-time data processing makes them essential for the sophisticated functions of contemporary vehicles, driving their high demand.
   
• Additionally, the shift towards software-defined vehicles (SDVs) has further boosted the need for robust processors. SDVs rely on powerful processors to enable seamless integration of various software applications and features, such as AI-driven audio, vehicle-to-everything (V2X) communication, and advanced connectivity. This growing reliance on processors for enhancing vehicle functionality and user experience underscores their prominence in the market.
   

Based on vehicle type, the automotive semiconductor market is divided into passenger car, light commercial vehicle, and heavy commercial vehicle. In 2023, the passenger car segment was the fastest growing segment, growing at a CAGR of over 10%. The market value of the passenger car segment is expected to reach over USD 100 billion by 2032 due to this significant growth rate.
 

• The passenger car segment was the fastest-growing segment in the automotive semiconductor market due to the accelerated adoption of advanced technologies and features in consumer vehicles. The increasing demand for electric vehicles (EVs), autonomous driving capabilities, and enhanced infotainment systems has driven substantial growth in this segment. Automakers are integrating more semiconductor solutions to support innovations such as advanced driver-assistance systems (ADAS), over-the-air (OTA) updates, and personalized in-car experiences, propelling the passenger car segment to the forefront of market expansion.
   
• Additionally, the shift towards higher levels of connectivity and automation in passenger vehicles has further fueled this growth. Consumer preferences for high-tech features, including advanced navigation systems, connected services, and in-car entertainment, are driving automakers to invest heavily in semiconductor technologies. This trend is reflected in the increasing volume of semiconductor components required for passenger cars, contributing to their rapid growth relative to light and heavy commercial vehicles.
   

Asia Pacific held the largest automotive semiconductor market share of over 35% in 2023, due to its dominant role in both automotive manufacturing and semiconductor production. The region is home to major automotive manufacturers and suppliers, including companies in China, Japan, South Korea, and India, which significantly drive demand for semiconductor components. Asia Pacific’s extensive automotive production capabilities and rapid adoption of electric vehicles (EVs) and advanced driver-assistance systems (ADAS) contribute to its leading market position. For instance, according to IEA, in China, new electric car registrations reached 8.1 million in 2023, up 35% from 2022.
 

Additionally, the region’s strong semiconductor manufacturing infrastructure supports the automotive sector's growth. Asia Pacific is a global hub for semiconductor fabrication and assembly, with leading companies like TSMC, Samsung, and NXP Semiconductors having significant operations in the area. This robust supply chain infrastructure allows for efficient production and distribution of automotive semiconductors, further solidifying Asia Pacific's dominance in the market. The combination of high production volumes and advanced semiconductor technology facilities reinforces the region's leading market share.
 

In the United States, the automotive semiconductor market is characterized by its strong focus on innovation and advanced technology integration. The U.S. is home to numerous leading automotive manufacturers and technology companies, such as Tesla, General Motors, and Ford, which are driving significant demand for sophisticated semiconductor solutions.
 

The emphasis on electric vehicles (EVs), autonomous driving technologies, and advanced driver-assistance systems (ADAS) has led to substantial investments in semiconductor R&D and production. Recent developments, including initiatives for EV infrastructure and autonomous vehicle testing, underscore the U.S.’s role as a key player in the market, fostering growth and technological advancement in this sector.
 

Germany is a central hub in the European automotive semiconductor market, known for its strong automotive industry and emphasis on engineering excellence. As home to major automotive manufacturers like Volkswagen, BMW, and Daimler, Germany plays a crucial role in driving demand for automotive semiconductors. The country’s focus on innovation, particularly in electric mobility and autonomous driving, aligns with its strategic vision for a sustainable automotive future. Recent advancements in German automotive technology, including initiatives for integrating AI and connectivity into vehicles, highlight the country's significant market presence and its impact on shaping the future of automotive semiconductors in Europe.
 

Japan is a leading force in the global automotive semiconductor market, leveraging its advanced technology and manufacturing capabilities. Japanese automakers such as Toyota, Honda, and Nissan are prominent in the development of cutting-edge automotive technologies, including hybrid and electric vehicles. Japan’s strong semiconductor industry, with major players like Renesas Electronics and Sony, supports the country’s position in the automotive sector. Recent trends in Japan’s market include significant investments in next-generation semiconductor technologies to support autonomous driving and advanced infotainment systems, reinforcing its role as a key contributor to the global automotive semiconductor landscape.
 

South Korea holds a significant position in the automotive semiconductor market, driven by its robust technology sector and major automotive manufacturers. Companies such as Hyundai and Kia are at the forefront of integrating advanced semiconductor solutions into their vehicles, particularly in the realms of electric vehicles (EVs) and connected car technologies.
 

South Korea’s semiconductor industry, led by companies like Samsung and SK Hynix, plays a crucial role in supplying high-performance components necessary for modern automotive applications. Recent developments in South Korea’s automotive sector, including the push for next-generation EVs and smart driving technologies, underscore the country’s growing influence and commitment to advancing the market.
 

Automotive Semiconductor Market Share

Infineon Technologies AG and NXP Semiconductors N.V. holds a significant share of over 15% in the market. The automotive semiconductor industry is highly competitive, driven by the presence of several leading global players. Companies like Infineon Technologies AG and NXP Semiconductors N.V. are at the forefront, offering a wide range of semiconductor solutions for power management, ADAS, and in-vehicle networking. Infineon’s strength lies in its expertise in automotive power semiconductors, while NXP excels in integrating secure connectivity and processing technologies. Both companies are heavily invested in R&D to support the growing demand for advanced automotive applications, maintaining their competitive edge in this dynamic market.
 

Onsemi and STMicroelectronics N.V. also play significant roles in the automotive semiconductor landscape, focusing on high-performance analog and mixed-signal components. Onsemi’s innovations in power and sensor solutions complement STMicroelectronics’ broad portfolio that includes microcontrollers and MEMS sensors. Both companies are strategically positioning themselves to capitalize on the rising trends in electrification and automation within the automotive sector. Their competitive strategies include enhancing product capabilities and expanding their market presence through partnerships and technological advancements.
 

Automotive Semiconductor Market Companies

Major players operating in the automotive semiconductor industry are:

• Analog Devices, Inc.
• Infineon Technologies AG
• NXP Semiconductors N.V
• Onsemi
• Robert Bosch GmbH
• STMicroelectronics N.V.
• Taiwan Semiconductor Manufacturing Company
   

Automotive Semiconductor Industry News

• In February 2024, Infineon Technologies and Honda Motor Co. signed a Memorandum of Understanding (MoU) to build a strategic collaboration for automotive semiconductor solutions. Honda has selected Infineon as its semiconductor partner to enhance the development of competitive and advanced vehicles. The collaboration will leverage Infineon's expertise in power semiconductors, Advanced Driver Assistance Systems (ADAS), and Electrical/Electronic (E/E) architectures.
   
• In June 2023, Nidec Corporation and Renesas Electronics Corporation have agreed to collaborate on the development of semiconductor solutions for a next-generation E-Axle (X-in-1 system) that integrates EV drive motor and power electronics for electric vehicles (EVs).
   

The automotive semiconductor market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue (USD Million & Units) from 2021 to 2032, for the following segments:

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Market, By Component

• Processor
• Analog IC
• Power discrete
• Sensor
• Memory
• Others

Market, By Vehicle Type

• Passenger Car
• Light Commercial Vehicle
• Heavy Commercial Vehicle 

Market, By Propulsion Type

• Internal Combustion Engine (ICE) Vehicles
• Battery Powered Vehicles (BEV)
• Hybrid Electric Vehicles (HEV)

Market, By Application

• Powertrain
• Safety
• Body Electronics
• Chassis
• Telematics & Infotainment
• ADAS

The above information is provided for the following regions and countries:

• North America
  • U.S.
  • Canada
• Europe
  • Germany
  • UK
  • France
  • Italy
  • Spain
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • ANZ
  • Rest of Asia Pacific
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America
• MEA
  • UAE
  • Saudi Arabia
  • South Africa
  • Rest of MEA