The global automotive semiconductor market is expected to grow from $41.84 billion in 2021 to $47.71 billion in 2022 at a compound annual growth rate (CAGR) of 14.0%, reports ResearchAndMarkets. The automotive semiconductor market is expected to reach $72.52 billion in 2026 at a compound annual growth rate (CAGR) of 11.0%.
The main components of an automotive semiconductor include a processor, analog IC, discrete power, sensor, memory, and other components. The processors are part of the automotive conductors to conduct the majority of basic arithmetic, logic, I/O tasks and assign directives to other chips and components of in a vehicle.
They help control different parts of the vehicle and at the same time act as a coordinator between different actions of the user. The automotive semiconductors are used in vehicles with different fuel types including diesel, gasoline, electric and hybrid. They are used for constant monitoring of different components in vehicles including powertrain, safety, body electronics, chassis, telematics and infotainment. The automotive semiconductors are supported for passenger vehicle, light commercial vehicle, heavy commercial vehicle, and other vehicle types.
Asia-Pacific was the largest region in the automotive semiconductor market in 2021, and it is expected to be the fastest-growing region in the forecast period. The regions covered in the automotive semiconductor market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East and Africa.
The increase in demand for electric and hybrid vehicles is expected to propel the growth of the automotive semiconductor market. While the economic effect of COVID-19 has dampened demand for petrol and diesel cars, demand for EV and hybrid vehicles have increased. Climate warming and aspirations to achieve net-zero emissions are driving the global shift to emissions-free motoring.
These EV and hybrid vehicle shifts help the economy by reducing fuel costs and changing consumption from petroleum products to more locally produced power vehicles. For instance, according to the Global EV Outlook 2021, consumers spent USD 120 billion on electric vehicle purchases in 2020, a 50% increase over 2019. Furthermore, the global electric vehicle stock reached 10 million in 2020, representing a 43% increase over 2019. Therefore, rising demand for electric and hybrid vehicles is expected to boost demand for automotive semiconductor during the forecast period.
Technological innovation is a key trend gaining popularity in the automotive semiconductor market. Major companies operating in the automotive semiconductor market are focused on providing technologically-advanced solutions to strengthen their market position. These companies are implementing next-generation automotive semiconductor technologies into their products, such as artificial intelligence, IoT, algorithmic chips, ICs, transistors, intelligent sensors, computing, and others, making devices and applications reliable, compactness, and of low-cost.
For instance, in November 2019, a Netherlands-based NXP Semiconductors, a semiconductor manufacturing company, launched a new automotive ultra-wideband chip capable of turning smartphones into car keys. This technology uses a new automotive UWB IC chip that provides precise, secure, real-time localization capabilities to enable cars to know exactly where the users are located.
