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Automotive Industry Shows Promise for Semiconductor Manufacturers

When Gartner becomes so unsure about its predictions that it not only changes its forecasts but warns of future corrections, the industry sits up and listens. This was the case in its 2017 chip market report, which placed total semiconductor revenue for 2017 at $386 billion. The global automotive electronics industry has been shifting to suit these outlooks, causing jumbled semiconductor rankings and improved research and development. The more electrified and innovative vehicles become, the more semiconductor demand rises.

Why Cars?

Everything from infotainment systems to intelligent sensors and cameras require reliable components, which is why automotive electronic systems are set to leap ahead of those used in communications and even computing. Both demand and costs are expected to rise in the automotive industry, too, and that’s quite apart from the hybrid car market’s influence.

The car industry is constantly looking for new ways to change the driving experience through features like self-diagnostics. Extension Media expects new innovations to allow cars to communicate with each other. In the near future, smart cars might use as many as 7,000 chips. By 2022, a single high-end car is expected to have over $6,000 worth of electronics. It’s little wonder that the industry’s principle analyst expects automotive semiconductor system sales to overtake those of cars themselves.

The current automotive electronics industry is represented by mature technologies like sensors and optoelectronics. Semiconductors are constantly becoming more sophisticated, a trend that appears to be affecting manufacturers as they move into narrower niches. With failure tolerance shrinking across consumer and industrial segments, this may segment the industry even further.

For more predictions and supporting figures, read the report on Solid State Technology.