Automotive Semiconductor Market Size, Share, Growth Analysis, By Component, By Vehicle Type, By Fuel Type, By Application, By Region - Industry Forecast 2024-2031

Automotive Semiconductor Market size was valued at USD 43.26 billion in 2022 and is poised to grow from USD 46.8 billion in 2023 to USD 87.2 billion by 2031, growing at a CAGR of 8.1% in the forecast period (2024-2031).

In recent years, the global automotive semiconductor market has been significantly influenced by shifting consumer preferences and technological advancements within the automotive industry. The increasing adoption of electric vehicles (EVs), autonomous driving capabilities, and connectivity solutions is driving demand for advanced semiconductor technologies. The integration of complex systems like advanced driver assistance systems (ADAS) and infotainment systems is propelling innovation in semiconductor technologies. According to SkyQuest analysis, government initiatives such as the Chips Act are supporting the automotive sector's transition towards electrification and autonomous vehicles through semiconductor use. Additionally, there is a notable trend towards more specialized and efficient semiconductors tailored for specific automotive applications. For instance, the U.S. government granted approximately $120 million to Polaris Semiconductor to expand its Minnesota plant and double its production capacity of sensor and power chips over a two-year period, supported by the Department of Commerce. Furthermore, under the semiconductor manufacturing and research subsidy program, the Biden administration allocated $52.7 billion, reflecting a strategic move to enhance domestic semiconductor capabilities, including agreements by Polaris' owners to sell stakes to U.S.-based firms, thus increasing domestic ownership.

Top-down and bottom-up approaches were used to estimate and validate the size of the Automotive Semiconductor Market and to estimate the size of various other dependent submarkets. The research methodology used to estimate the market size includes the following details: The key players in the market were identified through secondary research, and their market shares in the respective regions were determined through primary and secondary research. This entire procedure includes the study of the annual and financial reports of the top market players and extensive interviews for key insights from industry leaders such as CEOs, VPs, directors, and marketing executives. All percentage shares split, and breakdowns were determined using secondary sources and verified through Primary sources. All possible parameters that affect the markets covered in this research study have been accounted for, viewed in extensive detail, verified through primary research, and analyzed to get the final quantitative and qualitative data.

Automotive Semiconductor Market Segmental Analysis

The global automotive semiconductor market is structured across several dimensions including component type, vehicle category, fuel variant, application area, and geographical region. Components are categorized into processor types (such as microprocessor unit, microcontroller unit, digital signal processor, and graphic processing unit), discrete power components (including small signal transistors, power transistors, thyristors, rectifiers, and diodes), sensors (comprising image sensors like complementary metal oxide semiconductor (CMOS) and charged couple device (CCD), as well as pressure sensors, inertial sensors like accelerometers and gyroscopes, and temperature sensors), memory modules (such as dynamic RAM and static RAM), analog ICs (encompassing amplifiers, interfaces, converters, comparators, ASICs, ASSPs, logic ICs, and infotainment system components), lighting devices, and other miscellaneous components. Vehicle types encompass passenger vehicles, light commercial vehicles (LCVs), and heavy commercial vehicles (HCVs). Fuel types include gasoline, diesel, and electric vehicles (EVs) which include hybrid electric vehicles (HEVs), plug-in hybrid electric vehicles (PHEVs), and battery electric vehicles (BEVs). Applications are divided into chassis components (brakes, steering, traction control, suspension, and vehicle dynamic management), powertrain components (engine control units, EV motors, and transmissions), safety components (airbags, electronic stability control, adaptive cruise control, night vision, TPMS, and parking assistance), telematics and infotainment systems (dashboards, navigation systems, connectivity devices, and audio/video systems), and body electronics (body control modules, SETA, doors, mirrors, window controls, and HVAC systems). Geographically, the market spans Asia-Pacific, North America, Europe, Latin America, and the Middle East & Africa.

Drivers of the Automotive Semiconductor Market

The automotive sector is experiencing significant growth driven by the adoption of advanced technologies such as electric vehicles (EVs), autonomous driving capabilities, and connectivity solutions. This trend is bolstered by the integration of complex systems like advanced driver assistance systems (ADAS) and advanced infotainment systems, which stimulate demand for cutting-edge semiconductor solutions. Furthermore, the global automotive industry's shift towards energy-efficient and environmentally friendly alternatives is driving the need for specialized semiconductors. Increasing consumer demands for enhanced safety, efficiency, and connectivity in vehicles are further accelerating market growth.

Restraints in the Automotive Semiconductor Market

A primary challenge facing the market is the persistent global shortage of semiconductor chips, which has severely impacted the production capabilities of automotive manufacturers, resulting in delays and supply chain disruptions. The complex and advanced nature of automotive semiconductors further complicates matters, requiring sophisticated technologies and significant investments for their design and manufacturing. Additionally, the rising demand for electric vehicles (EVs) and the rapid advancements in autonomous driving technologies are exerting additional strain on semiconductor supply chains.

Market Trends of the Automotive Semiconductor Market

The increasing adoption of semiconductors in electric vehicles (EVs) reflects automakers' transition towards sustainable transportation solutions. Advanced driver-assistance systems (ADAS) are driving semiconductor advancements, enhancing safety and autonomy in driving. Connected vehicles and the shift towards smart mobility further fuel the demand for semiconductors that support improved connectivity, infotainment, and telematics functionalities. Additionally, there is a growing trend towards specialized semiconductors tailored for specific automotive applications, underscoring ongoing innovation in the industry.