The global automotive chip industry generated $49.8 billion in 2021 and is anticipated to generate $121.3 billion by 2031, witnessing a compound annual growth rate (CAGR) of 9.6% from 2023 to 2032, according to a new report by industry analyst Allied Market Research.

The global automotive chip market is driven by factors such as an increase in demand for advanced driving assistance systems (ADAS), a rise in demand for electric vehicles (EVs), and a surge in demand for autonomous driving. However, the complexity of design and high manufacturing costs are hampering the automotive chip market growth. On the contrary, increased focus on cyber security, and an increase in demand for connected cars are expected to offer remunerative opportunities for expansion of the automotive chip market during the forecast period.

COVID-19 impact

The automotive chip market faced a downturn due to the COVID-19 pandemic and the subsequent global lockdowns. However, as the global situation has recovered, the demand has increased for EVs and ADAS-equipped vehicles, which require automotive chip manufacturers to increase their production capacity and invest in new technologies to meet the growing demand for advanced automotive chips.

MCU segment to maintain leadership status throughout forecast period

Based on product, the microcontrollers segment held the highest market share in 2021, accounting for more than one-fourth of the global automotive chip market revenue, and is expected to maintain its leadership status throughout the forecast period. Due to the increase in demand for electric and autonomous vehicles, which require more advanced sensor technologies for functions such as battery management and perception systems is another factor driving the growth of sensor chips in the automotive chip market.

However, the sensor segment is projected to manifest the highest CAGR of 11.3% from 2022 to 2031. This is due to the surge in awareness of environmental issues is driving the demand for sensor chips in the automotive chip industry.

Based on application, the safety systems segment held the highest market share in 2021, accounting for more than one-fourth of the global automotive chip market revenue and is estimated to maintain its leadership status throughout the forecast period. The same segment would also display the fastest CAGR of 10.5% during the forecast period. Safety systems manufacturers are utilizing advanced semiconductor technologies such as radar, LIDAR, and image sensors, as well as high-performance microcontrollers and processors to meet the stringent safety requirements of the automotive chip industry.

Based on propulsion type, the ICE vehicles segment accounted for the largest share in 2021, contributing to around four-fifths of the global automotive chip market revenue, and is projected to maintain the lead position during the forecast period. owing to the rise in awareness of zero emission and carbon neutrality, and the implementation of these objective in the vehicle regulation around the globe.

Moreover, the EV segment is projected to manifest the highest CAGR of 16.3% from 2022 to 2031. This is owing to a rise in the government’s incentives and subsidies to encourage the adoption of EVs as a part of their efforts to reduce carbon emissions and combat climate change.

APAC to maintain dominance by 2031

From a regional perspective, North America held the highest market share in terms of revenue in 2021, accounting for nearly one-third of the global automotive chip market revenue.

On the other hand, the Asia-Pacific region is projected to maintain its dominance during the forecast period. The same region would also portray the highest CAGR of 11.4% from 2022 to 2031. This is due to the increase in demand for EVs and autonomous vehicles, as well as the developments in the automotive industry in the region.

By: DocMemory
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