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CAN ahead

Automotive semiconductor market is growing

CAN is the marketing leading communication technology in automotive electronics. The automotive semiconductor market is expected to reach US‑$ 67,5 billion by 2023.

The automotive semiconductor market increases with a CAGR (Compound Annual Growth Rate) of 13,1 percent from 2018 to 2023 predicts Research-And-Markets (Photo: AdobeStock)

The researchers from Market Study Report stated that CAN dominates the automotive communication technology market and accounted for about 40 percent of the market share in 2017. CiA estimates an annual installation of around 2 billion CAN nodes in 2018.

CAN networks are used to interconnect electronic control units in the active suspension, engine management systems, advanced braking system, lighting control, gear control, and central locking system embedded in the vehicle. They assists in reducing the wiring of the vehicle to a large extent. CAN is also used as a backbone communication system for a number of applications including body comfort, powertrain, chassis, telematics, and safety.

The automotive communication market is projected to surpass US‑$ 18 billion by 2024. One of the driving forces for the expected growth is the trend to automated driving even if autonomous driving is not coming that soon as some optimists are predicting. Considering the technological advancements and digital trends, it is projected that the total automotive industry investment will reach US-$ 82 billion by 2020. This not only includes the investment in Ethernet technologies but also in CAN FD and CAN XL. As customer requirements are rapidly increasing, it is essential for automakers to incorporate a higher number of nodes. With an increase in the number of nodes, the price of the automotive technology is also projected to rise, which will act as a major barrier to the automotive communication technology market growth.

The mid‑sized car segment is projected to grow at a CAGR of over 14 percent over the next years. The average wiring in a mid-sized car consists of over thousand wires weighing around 45 kg and measuring around 1 km in length. This has been achieved by introducing networks such as CAN. Besides the well-known semiconductor manufacturers, also some Tier‑1s such as Bosch and Continental produce a significant number of automotive chips.

Success in Japan: Infineon awarded again

According to Strategy Analytics, Infineon increased its automotive business in Japan by almost 25 percent in 2018. It thus grew faster than any other of the top ten automotive semiconductor suppliers in the country. Japan accounts for approximately 10 percent of global car production. A key pillar to Infineon’s success is its quality leadership strategy. Toyota once again honored Infineon for five years of zero defect deliveries to its Hirose plant. “Quality requirements are particularly high among Japanese car manufacturers,” said Peter Schiefer from Infineon. “Receiving an award for half a decade of immaculate shipments makes us very proud. Our strong commitment to zero defects is one of the reasons why we have continuously outgrown the automotive semiconductor market in Japan since 2010.” The data from Strategy Analytics shows that Infineon has far more than doubled its respective market share since the beginning of the decade.

Once a year, Toyota’s Hirose plant honors suppliers for their high quality. Infineon delivers CAN transceivers to the plant. For the second time in a row, Infineon has received the most prestigious prize: the Honor Quality Award, which is presented only to suppliers with a flawless quality record for four consecutive years. In recent years, Infineon also received awards from other automotive global players such as Hyundai‑Kia, Bosch, UAES, Denso, and Mitsuba. In the 2018 fiscal year, Infineon shipped more than seven billion automotive parts worldwide – not even 0,00001 percent of them were object of a customer complaint.

Solid growth for automotive semiconductors

Chris Webber from Strategy Analytics reported a solid growth for 2018, albeit not as strong as 2017. Expanding semiconductor opportunities in areas such as ADAS (advanced driver assistant system) and electrification were offset in part by softening in regional vehicle demand and vehicle OEM production disruption due to EU introduction of the WLTP (Worldwide Harmonized Light Vehicle Test Procedure).

Research-And-Markets has forecasted a global automotive semiconductor market increase by 13,1 percent (CAGR) from 2018 to 2023. The market will reach US‑$ 67,5 billion by 2023. The future looks promising with opportunities for passenger cars, commercial, and electric vehicles. The major growth drivers for this market are increasing vehicle production, increasing electronic content per vehicle, and growing demand for advanced vehicle safety and comfort systems. Emerging trends, which have a direct impact on the dynamics of the automotive semiconductor industry, include the introduction of high efficiency power semiconductors, and development of smaller single-chips for radar sensors.

The researcher forecasts that the powertrain and safety application will show above average growth during the forecast period due to the stringent government regulations for reduced vehicle emissions, and increased passenger safety. Antonio Garzon from Research-And-Market expects that Asia Pacific remains the largest region and witness the highest growth over the forecast period due to the high vehicle production and increasing awareness for passenger safety.

In 2018, the automotive semiconductor market was worth US-$ 41,8 billion, almost US‑$ 1 billion less than predicted, stated another source, Automotive Semiconductor Market Tracker by IHS. The global economic uncertainty affected car production in 2018 and memory prices finally started to decrease, but the automotive electronics market still grew 9,5 percent in the last year. However, in 2019 the vehicle production is expected to decrease again and the semiconductor market will stagnate due to the effects of inventory burn-off. In the long term, the market will partially recover, reaching US‑$ 65,5 billion by 2025. The semiconductor content per car will double from US-$ 312 in 2013 to US‑$ 652 in 2025, resulting in a CAGR of 8 percent in this period. Electronics for ADAS and Hybrid/Electric vehicles are the fastest growing segments with 13 percent respectively 29 percent CAGR.

Among all semiconductor categories, logic and memory ICs will grow the fastest over the next five years driven by automated driving and advanced infotainment applications using SoCs. IHS gives a quarterly update of the semiconductor market, quantified in terms of units and revenue by application and by semiconductor type. It also includes in-depth market analysis of more than 100 automotive semiconductor suppliers.