Automotive semicon chip market to reach US$ 84.3 billion in 2028 at 11.9% CAGR

Date: 20/10/2023
Market researcher Yole has reported that the automotive specific semiconductor chip market to see robust growth that it is estimated to generate a revenue of US dollar 84.3 billion in 2028 growing 11.9% CAGR from year 2022 where it is estimated to have generated revenue of US$ 43 billion.

Yole said the percentage of semiconductor chip value per car is around US$ 540 in year 2022 and is estimated to reach US$ 912 in 2028.

The major key drivers of the market are electrification and driving automation technologies such as ADAS.

Eric Mounier, Ph.D., Director of Market Research at Yole Intelligence said “In 2022, each car contains around US$540 worth of semiconductor chips, which is projected to rise to about US$912 by 2028. This is driven by the adoption of ADAS and electrification, increasing the number of chips per vehicle from 850 to 1,080.”

Further findings shared by Yole includes:

Key drivers are numerous and include electrification, requiring new substrates like SiC , advanced technology nodes as small as 16nm/10nm for ADAS components and a growing demand for memory, especially DRAM and computing power for Level 4 and 5 autonomous vehicles.

At the wafer level, Yole Intelligence announces wafer shipments to increase from 37.4 million units in 2022 to 50.5 million in 2028. It includes memory, processors, and MCU s leading the way for 12-inch wafers. SiC devices will continue to grow due to EV /HEV adoption, while advanced nodes below 16nm will be driven by ADAS technology.

OEMs are increasingly embracing vertical integration to electrify their operations, with strategies varying by industry segment and region. Power electronics and semiconductors are vital focuses, with some OEMs making direct investments.

Pierrick Boulay, Senior Analyst, Lighting and ADAS systems at Yole Intelligence said “The semiconductor supply chain lacks a clear strategy, necessitating expertise in semiconductor tech as well as supply chains. OEMs need to prioritize key components, build new relationships with manufacturers, and choose procurement strategies.”

Yu Yang, Ph.D., Senior Technology and Market Analyst at Yole Intelligence commented “Constraints persist in semiconductor supply, particularly for mature nodes, Options for chip manufacturers include redesigning chips using smaller nodes or partnering with Chinese foundries, which are set to expand with government support, potentially reaching a 33% market share in mature nodes.”

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auto semi 23

Although after the COVID linked chip shortage, the focuses of automotive OEMs to semiconductor keep increasing, we see in general a lack of comprehensive strategies on semiconductor among OEMs. For the first time, Yole Intelligence build an analytical model dedicated to automotive semiconductors. The so called ‘Yole Triple-C Model’ is designed to help OEMs in Car, Chip, and Confine metrics, representing respectively the coverage of semiconductor technologies, the depth of involvement in semiconductor value chain, and the resilience of semiconductor supply chain.

Passenger and light commercial vehicles are shifting into a “Market-driven” phase of innovation adoption, while medium and heavy-duty commercial vehicles are starting their electrification journey, primarily due to incentives and regulations.
Key trends in powertrain and electrification include:

Integration of high-voltage systems.
Adoption of 800V technology for fast charging.
The introduction of SiC in supply chains.
The increasing popularity of dedicated BEV platforms.

ESG concerns are also growing in importance. Si IGBTs are gaining traction to address cost barriers, especially in hybrid solutions with SiC MOSFETs.