A new Strategy Analytics study, Automotive Semiconductor Vendor 2006 Market Shares highlights an increase of $1.12 billion in chip vendor revenues in 2006 in the automotive electronics industry, compared to 2005. With combined revenues of $5.1 billion, the report notes Freescale, Infineon, and STMicroelectronics are the three leading vendors.
The Strategy Analytics analysis of the top 21 vendor revenues shows that automotive semiconductor supplier revenues grew by 6.8% ($1.12 billion) in 2006 to $17.53 billion. Despite strong electronic system volume increases, the growth rate was down slightly compared to an increase of 7.5% in 2005.
"Chip vendors enjoyed another good year, although the revenue growth rate in 2006 was down slightly on 2005. This is indicative of the intense downward price pressure in the supply chain exerted by vehicle OEMs," says Chris Webber, Strategy Analytics VP for global automotive. He goes on to tell Automotive DesignLine that the top five automotive semiconductor vendors (the three, in order above, plus Renesas and NEC Electronics) owned 43% of the 2006 global market.
"In addition to the vendor shares our report analysis shows that semiconductor-based sensors and non-power analog ICs enjoyed the highest growth in revenues," notes Webber.
Safety, comfort, infotainment
As for specifics, he goes on to report, "Safety applications are the largest growth driver, both from increasing penetration of existing (passive) safety systems such as ABS, VSC/ESP (stability control) and occupant protection, and the introduction of new (active) advanced driver assistance systems (ADAS) such as adaptive headlamps, autonomous cruise control, blind spot monitoring, lane departure warning, night vision, driver drowsiness alert, and others. These systems typically use semiconductor based sensors plus high performance processors and the memory needed to store and run the extensive software and data in these more complex systems. Systems with actuators, such as in adaptive headlamps, also have significant power semiconductor content."
"Body systems, encompassing comfort and convenience features, are another high growth area, particularly passive keyless entry (PKE) systems, power (door, trunk) closure systems, rain sensitive wipers, LED lighting, and others. Also, these and other domains are all increasingly networked together, driving growth for bus transceivers, gateways, and protocol handling," Webber adds.
"Finally, infotainment is a hot-bed of activity. There's a lot of hype about mobile video at the moment but audio, although a mature feature, will remain at the core of the in-vehicle entertainment system. However, digital and HD broadcast radio is driving semiconductor growth as well as consumer demand for connectivity to personal music players (MP3/iPod). USB and wireless Bluetooth A2DP are among the solutions now emerging in the car audio aftermarket. Embedded navigation systems will continue to remain only a slow growerthanks to a combination of vehicle OEMs keeping the embedded nav system prices too high for most consumers and the boom for lower cost PNDs (portable navigation devices) like Tom-Tom, Garmin, etc," he says.
Webber notes the challenges facing automotive semiconductor vendorsmainly the previously noted intense downward pressure on prices from the vehicle OEMs. "However Strategy Analytics does not see any shrinkage in the automotive semiconductor market thanks to the performance demands of feature enhanced next-generation systems. Even in 'mature' areas like power train, expanding demand for hybrid vehicles and deployment of technologies like in-cylinder pressure sensing and dual-clutch automated manual gearboxes will drive up semiconductor demand. Incidentally, power train control will remain the predominant semiconductor application due to its complexity and virtual 100% penetration of vehicle production. Also, let's not forget expanding vehicle production and consumption in places like China. We expect the automotive semiconductor market to grow in the next 5 years at a CAGR of around 8%," he concludes.
For further market information, Strategy Analytics updates its report Automotive Semiconductor Forecast 2004 - 2013: Safety and Convenience Electronics Key to Growth each year in late summer.