Automotive Semiconductor Market Size

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.

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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.