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Automotive semiconductors

Mergers and acquisitions change the market

Market researchers from IHS have published the shares of the top-10 semiconductor suppliers in the automotive industry. After its merge with Freescale, NXP is on top.

Among the market-leading automotive chipmakers are Bosch and Osram, which is normally not associated with this business (Photo: Fotolia)

In total the automotive semiconductor market increased from 2014 to 2015 by a very modest 0,2 %. The market reached about US$ 29 billion in 2015 according to IHS. Other market researcher such as Technavio published similar results for 2015: US$ 27,86 billion. They forecast an annual growth of 6,42 % until 2020. “With advances like the emergence of 3D and ultra-high definition (UHD) TVs and hybrid laptops in the consumer electronics sector, the demand for semiconductor ICs will further increase during the forecast period. This rise in demand for semiconductor ICs will, in turn, generate demand for semiconductor devices,” said Asif Gani, one of Technavio’s lead industry analysts for semiconductor equipment.

Markets and Markets, another market researcher, valued the automotive semiconductor sales in 2015 at US$ 32,46 billion. They expect that this market reaches US$ 48,78 billion by 2022, at a growth rate of 5,8 % between 2016 and 2022. The most significant factor driving the market is the increasing vehicle production, which in turn leads to the rise in demand for automotive semiconductors. The rising trend of vehicle electrification and growing demand for advanced safety, convenience, and comfort systems are the other factors driving the growth of the semiconductor content in the automobiles.

The automotive semiconductor market includes CAN transceiver and CAN controller ICs. Far more than 1,5 billion CAN nodes were installed in 2015 according to information from different chipmakers. In the last 12 months, several mergers and acquisitions led to changes in the ranking list of automotive semiconductor manufacturers. After the acquisition of Freescale, NXP is on the top with a market share of 14,3 %. Infineon (9,8 %), which acquired IR International Rectifier last year, follows before Renesas (9,1 %). Following are STMicroelectronics (ST) and Texas Instruments (TI). Although Microchip acquired Atmel, they are not under the top ten. The ranking was also strongly influenced by the $-to-Yen exchange rate.

“The acquisition of Freescale by NXP created a powerhouse for the automotive market. NXP increased its strength in automotive infotainment systems, thanks to the robust double-digit growth of its i.MX processors,” said Ahad Buksh, automotive semiconductor analyst for IHS Technology. “NXP’s analog integrated circuits also grew by double digits, thanks to the increased penetration rate of keyless-entry systems and in-vehicle networking technologies.” NXP will target the machine vision and sensor fusion markets with the S32V family of processors for autonomous functions, according to the IHS.

Infineon’s Tricore micro-controller family reinforced the company’s position in the powertrain and chassis applications. Most of the variants support CAN connectivity and in the future CAN FD. ST’s automotive revenue declined 2 %, which was also caused by the US$-to-€ exchange rate, which dropped by 20 % last year. On the other hand, US-chipmaker TI increased its automotive business by 16,6 %. ST reported several design-wins and TI saw the increase mainly in infotainment, ADAS (advanced driver assistance system), and hybrid-electric vehicles.

Bosch, the market-leading Tier 1 supplier, is also one of the big chipmakers for automotive ECUs. Continental also develops and produces its own semiconductors. Both companies manufacture CAN transceiver chips and SBCs (system base chips) with embedded CAN transceivers. Bosch additionally provides CAN and CAN FD IP cores as well as Classical CAN stand-alone controllers.

Top 10 automotive semiconductor suppliers in 2015

RankCompanyRevenue (US$ million)Market share (percent)
1 NXP (including Freescale) 4178 14,4
2 Infineon (including IR) 2850 9,8
3 Renesas 2671 9,2
4 STMicroelectronics 2096 7,2
5 Texas Instruments 1871 6,4
6 Robert Bosch 1478 5,1
7 ON Semiconductors 1142 3,9
8 Micron Technology 661 2,3
9 Toshiba 652 2,2
10 Osram 646 2,2
n.a. Others 10785 37,2
Total 29030 100

ADAS as a driver of the semiconductor business

In the next years, we may see more mergers and acquisitions. In addition, new companies will introduce specific semiconductors for ADAS, security, and functional safety. In the CAN business, the number of main IC suppliers will also decrease in the future due to further mergers and acquisitions. On the other hand, new players with specific chips providing CAN interfaces will join the market. ASICs and other customized ICs gaining market shares.

In particular, ADAS will drive the semiconductor business: IHS expects semiconductor and sensor revenue from ADAS to increase from US$1,9 billion in 2015 to US$4 billion by 2020. The National Highway Traffic Safety Administration of the United States has mandated that all new cars must be equipped with backup cameras by 2018. The market-leading carmakers have committed to including emergency brake systems in all new vehicles by 2022. Even the Indian government has decided to make it compulsory for all cars to be equipped with ABS (anti-lock braking system), airbags, and a speed warning system on all cars sold after October 2018. This means that low-end cars need more CAN communication. Tata is already improving its Nano with more CAN-connected ECUs.

Chipmakers have already started co-operations with partners to offer reference and development platforms. Producing chips is not enough. Qualcomm, for example, has announced the Connected Car Reference Platform to simplify integration of wireless communication into vehicles. This platform features in-vehicle networking technologies such as CAN and Gigabit (OABR) Ethernet with Automotive Audio Bus (A2B) interfaces. STM cooperates with ETAS to deliver a platform for sub-system developers to create ECUs that ensure a high level of protection for vehicle-owners’ privacy, OEMs’ intellectual property, ECU functional integrity, and secure communication among the car’s ECUs and the cloud.