While so much of the industry news focuses around mobility trends rooted in smartphones, tablets, and now convertible tablet-PCs, mobility's powerful growth drivers extend well into other industries, notably automotive.
Recent research from iSuppli underscores teh importance of automotive electronics for semiconductor revenue growth:
Total semiconductor revenue in 2013 derived from automotive infotainment will reach $6.67 billion, up 3 percent from $6.48 billion. Growth this year will be slower than last year's approximately 4 percent increase, but solid expansion returns next year and beyond, with revenue growth of 3 to 7 percent set to occur each year during the next five years. By 2018, automotive infotainment semiconductor revenue worldwide will amount to $8.54 billion.
Automotive drivers remain strong
Automotive's ranking among the higher growth industries for semiconductor content is directly related to the high level of component penetration rates coupled with increased auto sales. The penetration stems from not just an increase in infotainment features but in safety, monitoring, and assisted driver features.
The latest features are pushing both automotive MEMS content higher and adding new opportunities for on-board cameras and the associated screens for viewing, as noted by iSuppli recently:
Driven by declining prices, usage of cameras in motor vehicles is set to soar in the coming years, rising by a factor of more than five from 2012 to 2020 […].
Shipments of cameras for cars will rise to 82.7 million units in 2020, up from 16.0 million units in 2012. Shipments will surge to 20.2 million units this year.
Current camera offerings in cars range from the reverse and park camera to blind-spot detection, to night vision, to a system that shows the entire car and its surroundings from a top-down point of view.
Not only does this forecast bode well for the otherwise troubled camera market, it adds further momentum to touchscreens, IC drivers, and related components.
Mobility and automotive tightly coupled
Automotive's focus is also keenly on the wider mobility trend, with many drivers considering in-car connectivity and hands-free access among the decision points when purchasing their new vehicles. As cited in The Detroit News, "General Motors Co. Chairman and CEO Dan Akerson said […] that the automaker thinks cars and trucks will become the "next major technology platform," and it plans to leverage its OnStar unit's size and services and new 4G LTE mobile broadband to help it bring more connected services to consumers."
This connectivity is not just for communication purposes, it is importantly also connecting users mobile software preferences and information demands into a seamlessly transferred experience in their vehicles. As iSuppli research clearly points out:
For instance, automotive infotainment systems are quickly developing toward a PC-like architectural approach in which more functionality is dependent on a powerful main central unit, IHS Automotive believes. This means that software will acquire greater importance as a differentiator among brands seeking to make their infotainment products and features stand out. Applications previously implemented via hardware will be reconfigured instead into simpler programs reliant on a heavily centralized unit marked by strong processing power and memory capabilities.
On a semiconductor level, growth will be fostered not just by the implementation of more infotainment features into a vehicle, but also by broader technology diffusion among various vehicle segments—trickling from high-end luxury rides all the way down to entry-level pieces. Government regulations and mandates, including those relating to electronic stability control or tire-pressure monitoring, will also help boost semiconductor growth.
Clearly, this type of automotive electronics growth holds significant promise for a much wider set of semiconductor components than we've seen to date. By moving to more of "a PC-like architectural approach," the opportunities for memory, processors, and a wider set of ICs, both digital and analog, are certainly there.
Auto infotainment supports semi growth
The demand for emerging automotive technologies is clearly there, as documented by J.D. Power study, with vehicle owners rating highly their consideration of various electronic features when choosing between vehicles. Specifically, focus on safety, fuel efficiency, communications, and increasingly navigation/GPS and traffic systems as well as seamless connectivity to personal mobile devices and applications, rated among the highest by new vehicle purchasers.
iSuppli's research confirms the impact on semiconductor market growth described in the J.D. Powers study:
In-dash navigation systems, for instance, will enjoy increased penetration worldwide in vehicle head units, deepening from 19 percent last year to more than 32 percent in 2018. Total in-dash silicon revenues in 2013 will reach $290 million, up from $274 million in 2012.
For connectivity systems in head units—a major trend in infotainment—Bluetooth and USB remain the de facto standard for wired and wireless connectivity given a 35 percent attach rate for each in 2012. Increased momentum will likewise be found in other technologies aiming to cover high-definition applications, such as High-Definition Multimedia Interface (HDMI) and Mobile High-Definition Link (MHL).
In telematics, General Motors’ OnStar and other similar systems continue to have the most mature and widespread market presence. OnStar-type embedded systems hauled in revenue of $480 million last year, with takings by 2018 expected to reach $1.8 billion.
These are significant growth drivers with strong momentum that supports not only the automotive industry, but notably raises the importance of the auto sector for the global semiconductor and electronics industry. As our industry continues to diversify and shift in relationship with mobility trends, we are seeing that a wider range of semiconductor components are benefiting from once niche market growth. The reasons are simply based in the merging of users experiences into holistic technological ecosystems not siloed based on where they are, but rather now erasing location borders to provide seamless experiences as users move throughout their day.