Market Trends of Automotive Integrated Circuits Industry
Logic IC is Expected to Witness Significant Growth
- The emphasis on safety and functional requirements in the automotive industry is significant. Logic ICs ensure the safe and reliable operation of various automotive systems, including ADAS, autonomous driving, and powertrain control. The demand in the automotive market is fueled by the requirement for dependable logic ICs that deliver high performance and adhere to strict safety regulations like ISO 26262. Logic ICs can process and execute sophisticated algorithms and logical functions for vehicle control, monitoring, and communication.
- The pursuit of autonomous vehicles is a significant trend in the automotive industry. Logic ICs are essential for the complex processing and decision-making required for autonomous driving. According to Roland Berger, in 2025, the penetration rate of level 4 light autonomous vehicles is expected to be 1%, with a gradually increasing market share in subsequent years. In addition, 5% of the global market will comprise level 4 light autonomous vehicles by 2030. As self-driving technology advances, logic ICs with increased processing power, advanced sensor integration, and robust safety features are expected to be in demand.
- Furthermore, connected cars are becoming increasingly common, with features like vehicle-to-vehicle (V2V) communication, vehicle-to-infrastructure (V2I) communication, and in-car connectivity. Logic ICs are critical for managing connected vehicles' communication protocols, data processing, and connectivity functions. According to SBD Automotive, it is expected that 96% of all new vehicles to be imported into the world by 2030 will be equipped with connectivity.
- Moreover, the shift toward EVs is gaining momentum due to environmental concerns and government regulations. EVs are based on advanced power electronics and battery management, which requires specialized logic ICs to ensure optimum energy use, motor control, or charging infrastructure integration. Logic ICs are crucial for processing multimedia data, managing user interfaces, and enabling seamless integration with external devices. Future trends include logic ICs with enhanced security measures and robust authentication mechanisms to ensure the integrity and privacy of automotive data.
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Asia-Pacific is Anticipated to Hold a Significant Market Share
- Asia-Pacific is a robust and rapidly growing automotive integrated circuits market. With emerging economies, robust manufacturing capabilities, and increasing demand for electronic devices, Asia-Pacific is pivotal in driving integrated innovation, production, and consumption of circuits.
- The rapid growth of EV markets in Asia-Pacific is expected to significantly impact the logic integrated circuit (IC) market. As EVs incorporate more advanced technologies like ADAS and intelligent driving systems, the demand for ICs, especially those for processing and control systems, is likely to surge. The shift toward EVs also necessitates developing charging infrastructure, which relies heavily on IC technology. As a result, semiconductor companies specializing in logic ICs are poised to benefit from the expanding EV markets across the region.
- Asia-Pacific is a global manufacturing hub for semiconductor production, with countries such as China and Japan leading in semiconductor manufacturing and assembly. The presence of leading semiconductor foundries, assembly and testing facilities, and electronics manufacturing services enables efficient and cost-effective production of logic ICs. It is home to a vast and rapidly expanding automotive market with developments in ADAS and EVs and increasing industrialization and automation.
- China is widely recognized as a significant leader in the automotive and mobility industry owing to the consistent performance of the domestic market and its enormous potential. The Chinese Ministry of Industry and Information Technology projects that domestic vehicle production will reach 35 million by 2025, further strengthening its position as the world's leading car manufacturer. According to CAAM, during August 2023, China's new energy vehicle sales amounted to 846,000 units, 808,000 of which were passenger EVs and 39,000 were commercial electric vehicles, and sales of BEVs and PHEVs were 559,000 and 248,000 vehicles, respectively. These factors are expected to contribute to the segment’s growth.
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