Smart Car Revolution Fails to Boost Automotive IC Market
16 May, 2016
While everybody talk about smart, connected and autonomous cars - The Automotive electronics IC market grew only 0.4% in 2015
While everybody talk about smart, connected and autonomous cars – The Automotive electronics IC market grew only 0.4% in 2015
The share of automotive electronic devices sales in the global electronic market has grown by a mere 0.4% from 2014 to 2015. Automotive electronics represented only 8.9% of the $1.42 trillion total of 2015 electronic sales compared to 8.6% the year before. These figures are surprising considering the constant increase in the integration electronic system by automotive manufacturers. Formerly high end technologies are trickle to middle range cars, while new technologies are being adopted by more and more manufacturers.
According to IC insights Report, automotive electronic system sales are forecasted to increase only slightly over the next years to 9.4% in 2019. The research group believes that pricing pressures on automotive ICs and electronic systems will prevent the automotive end-use applications from accounting for more than its current share of total electronic systems sales through 2019.
The chart below shows that average selling price in for the three largest automotive IC markets is constantly falling. The falling prices in all three segments offset the growth in sales over the last few years. The IC market actually shrunk by 3% to $20.5 billion in 2015, but is expected to grow in 2016. The US National Highway Traffic Safety Administration push to make more electronic systems such as backup cameras mandatory, as well as similar moves in other countries will no doubt play an important role in return to growth. The automotive IC market is expected to reach $28.0 billion in 2016, a 5.6% annual growth from $21.1 billion in 2014.
Analog ICs and MCUs together accounted for 74% of the estimated $20.5 billion automotive IC market in 2015. Demand for automotive MCUs continues to expand as more vehicles are designed with embedded computer systems to address safety and efficiency issues demanded from legislators and consumers. As cars get smarter and more connected, demand is growing for memory and storage to support a wide array of applications, particularly those that require quick boot up times as soon as the driver turns the ignition key. DRAM and flash memory, which receive considerable attention in computing, consumer, and communication applications, are currently much less visible in the automotive IC market but memory ICs are expected to account for 12.0% of the 2019 automotive IC market, an increase from 7.8% in 2015.