The global Automotive Chip Market is
expected witness a rapid expansion over the forecast period. Rising
computerization and digitization of automotive parts are anticipated to fuel
the industry growth. In addition, rapid incorporation of Engine Control Unit
(ECU) in modern automobiles is also expected to augment the market demand over
the next few years. These chips are required to monitor and control various
functions of a vehicle as they use algorithms to direct the part to operate in
a particular manner. Technological developments in the automobile industry have
led to an active involvement of computers in the operations of automotive
engines.
Manufacturers
are harnessing the power of digital control equipment leading to
high-performance delivery of automobiles. Ongoing research to discover the
innovative use of automotive chip may act as a key factor for increasing the
product demand. Manufacturers such as Renesas Electronics Corporation and NXP
are actively eyeing automobile brands at collaborative manufacture initiatives.
It follows a declining demand from the computer industry and manufacturers are
now aiming at exploiting the growing automotive chip market. However, with only
a few key players directing the market dynamics, the smaller companies may face
challenges to sustain.
Manufacturers
such as ARM Holdings, generating more than 40% revenue from smartphone
industry, are actively developing products that may be required in future by
the automobile industry. However, with elongated design cycles, the industry is
still in pre-nascent stage and may begin rolling out products only after a few
years. Further, the collaborative efforts of automobile manufacturers and chip
makers are expected to fuel demand over the forecast period. The market can be
segmented by type into after-market and Original Equipment Manufacturer (OEM)
products. While the OEM sector accounts for a healthy growth, due to active
development stage activities, the after-market sector is poised to witness a
substantial growth over the forecast period.
This growth
may be attributed to increasing demand from the Asia-Pacific region where
cost-effective after-market solutions are widely available and future demand
for these components is expected to be high. The advent of hybrid vehicles and
self-driven cars is also expected to spur demand owing to extensive
computer-based operating systems used in them. The industry depends heavily on
the global automobile production. Since most chip manufacturers are entering
into agreements with automakers, smaller companies are facing challenges to sustain
in the market, impeding the overall industry growth. However, with the varying
product features, firms may develop competency for specific components,
imposing market growth.
Ongoing
usage in automobiles incentivizes manufacturers to integrate related functions
in their existing offerings, creating new products with multi-function
capabilities. Manufacturers are focusing on automobile sector more as compared
to communications, medical/healthcare, government, and military owing to the
maximum demand. Automotive chips find numerous applications in safety,
performance, and infotainment-related requirements. While the infotainment
sector exhibits a healthy growth, the security and performance-related chips
are yet to capture the market, which may be attributed to the relatively
simplistic nature of the infotainment systems chips.
The safety
and performance related circuits require extensive R&D on the
manufacturer’s end, often causing a delay in rolling out products to consumers.
However, with the increasing demand for computer-controlled safety and
performance, the growth is anticipated to be high. Some of the key companies in
the global market include Texas Instruments, Inc.; Renesas Electronics
Corporation; Infineon Technologies AG; STMicroelectronics; NXP Semiconductors
N.V.; and Robert Bosch GmbH; North America currently accounts for the majority
revenue share of the global market followed by Europe and Japan. Asia-Pacific,
with its growing population and increasing automobile demand, is expected to grow
at a healthy CAGR over the forecast period, providing ample growth
opportunities for the companies.
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