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Growth is Strong for Automotive Semis: Increased penetration and market expansion


With market news still volatile these days, it is important to keep in mind that all is not bleak, in fact there are significant sectors that continue to expand at healthy rates.  The automotive industry continues to redesign and increase features in order to attract demand from consumers for new vehicles and to meet the ever-increasing set of safety and environmental features being mandated.

The combination of new safety and infotainment features is translating into a significant semiconductor and electronics penetration increase per vehicle.  Add to this growing penetration rate the increased demand for feature-full vehicles, particularly in the growing emerging economies, and you end up with a very healthy forecast for the automotive semi sector.

As iSuppli recently reported here, China continues to outpace the rest of the world in the automotive electronics sector, with 2011 market revenue in China set to be up 9.7% year-over-year.  "Overall, automotive electronics revenue in China is anticipated to reach $29.9 billion by 2015," according to the same iSuppli report.

While the 9.7% revenue growth rate for China in this mostly challenging year may seem quite impressive, looking farther afield at the forecasted CAGR for automotive semis generally and globally, the numbers only continue to go up, as reported in this article from ElectroIQ, based on an iSuppli report:

"[…] the years 2012, 2013 and 2014 grow at much higher year-over-year increases of 16.2%, 8.4% and 11.7%, respectively, in sensor revenues as vehicle production recovers fast and mandates begin to accelerate toward full adoption in the regions of their implementation. The majority of the market belongs to North America and Europe."

Of note is that before long, there will be a saturation of new car purchases, presently higher due to demand from the emerging economies.  However, as safety and electronic (infotainment) features increase per vehicle, the automotive semi sector will sustain healthy growth.  Sensors, particularly automotive MEMS for air bags, electronic stability control (ESC), tire pressure monitoring system (TPMS), and engine management units are expected to see the greatest volume increase.  Additional automotive semi content is, of course, coming from the growth due to the increased number of hybrid- and electric vehicles on the roads.

The other growth sector related to automotive semis is the developing wireless power transmission (WPT) sector which becomes increasingly important with the rise of electric vehicle charging, as explored in this article from Automotive Design Europe. While the WPT sector is a bit farther afield, likely a five+ year ramp, the opportunities as well as necessity of features offered by WPT for recharging electric vehicles holds promise and new growth sectors for semi; attractive thoughts for today’s tougher markets.

Lisa Ann Cairns, Ph.D.
Written on Tuesday, 20 September 2011 16:52 by Lisa Ann Cairns, Ph.D.

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