Automotive Semiconductor Market: 3 Tech-Driven Trends Outline
                     Automotive Semiconductor 
Market: 3 Tech-Driven Trends 
Outline
Semiconductors have facilitated several innovations in automotive technology, including 
DRAM & NAND flash, sensors, vision-based graphics processing units (GPUs), etc. With 
cars becoming increasingly complex, there will be a steady demand for automotive 
conductors. As per Inkwood Research, the global automotive semiconductor market is 
projected to register a CAGR of 9.84% between 2024 to 2032.
Sustainability policies, surging use of technologies, innovative business models, rising 
automation, and digitization have revolutionized industries and economies globally. The 
automotive semiconductor industry is no exception. 
In the last few years, there have been many simultaneous disruptions in the automotive 
industry. These include the integration of different technologies into the mass production of 
cars, improved LIDAR sensors, matrix LED lights and enhancements in EV batteries, 3D 
mapping applications, and augmented-reality technologies like heads-up displays.
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This blog explores the three technology-driven trends shaping the automotive 
semiconductor market:
 Connected Cars
Semiconductors are the major constituent of electronics in technologically advanced 
automobiles. They are used for critical functions like power management, safety features, 
sensing, and control & display of the vehicle. They process the captured data using on-
vehicle computing systems that provide timely, accurate, and reliable control systems for the
car. These can be achieved through ultrasonic sensors, radar, light detection, and image 
cameras. 
Online navigation and hands-free mobile service are the current standards in new vehicles. 
However, at present, automotive players are moving toward the next way of innovation in 
connected cars. The new offerings include telematics services reliant on human-machine 
interfaces, including eCall and voice assistance. Such developments help alert drivers about 
available parking spaces, collision avoidance, and road closures. 
Accordingly, 5G networks are predicted to supplement vehicle-to-vehicle and vehicle-to-
infrastructure connectivity. For instance, Deutsche Telekom’s SmartHome App allows 
users to adjust their home’s lighting and heating while on the road. Overall, connectivity 
strongly influences vehicle purchase decisions, and as a result, connectivity solutions, with 
their increasing importance, are set to raise revenue for OEMs. 
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 Vehicle Electrification
The automobile industry is steadily integrating electronics into cars to enhance infotainment, 
system monitoring, safety, navigation, etc. Also, the thriving automotive market offers 
lucrative opportunities for automotive semiconductors to supplement improved sensors, 
increased connectivity, and battery performance in electric vehicles.
Further, the automotive semiconductor content in hybrid and electric cars is higher than in 
conventional cars. Besides, electric vehicles need hundreds of semiconductors than average
combustion-engine cars. In addition, such vehicles need power metal–oxide–semiconductor 
field-effect transistors (MOSFETs), application-specific integrated circuits, microprocessors, 
and high-performance microcontrollers. 
Semiconductors allow electric vehicles to become safer and smarter, as well. For instance, 
they support touch-screen interactivity with the driver and passenger and electric vehicle 
(EV) batteries and components in the power train. Semiconductor chips facilitate power 
systems that apply updates to firmware. Also, the need for semiconductors increases with 
the growing digital advancements in electric vehicles and tech innovations. 
But, how are innovations in semiconductors expected to shape the battery 
landscape?
Semiconductor innovations can enable longer and more efficient battery life. This is because
common electric batteries rely on outdated technologies, limiting their performance, further 
reducing the life span and raising the costs of electric vehicles. 
Accordingly, semiconductor chemistries like Silicon Carbide (SiC) and Gallium Nitride (GaN) 
enable operations for EV batteries at higher voltages compared to traditional silicon wafers; 
for instance, Tesla Model 3 uses Silicon Carbide MOSFETs for its main inverter. 
 Advanced Driver Assistance Systems (ADAS) 
Advanced Driver Assistance Systems (ADAS) are assistance systems based on electronic 
control technology. They use sensors like cameras and radar to perceive the surroundings 
and provide the required information to the driver to take action. Automotive processors 
integrated with neural processing units (NPUs) for AI processors are the brainpower of these
systems, assessing signals from onboard sensors to recognize obstacles and lane 
markings. 
The continual demand for driver assistance systems is raising the demand for advanced 
semiconductors in automotive. Chips with built-in ‘intelligence,’ known as application-specific
integrated circuits (ASICs), are customized to a specific application. According to Inkwood 
Research’s estimations, advanced driver assistance systems (ADAS) are expected to 
garner the largest revenue share in the global market by 2032.
Most of the automotive sector’s increasing importance as a revenue source for 
semiconductor companies is attributed to the shift to ADAS. This is because these systems 
should instantly process data while responding to unexpected changes like sudden stops in 
traffic.
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Such capacities need multiple interconnections within the high-performance chips and 
vehicle. Consequently, they have a centralized electrical and electronic (E/E) architecture 
and more electronics’ content and sensors compared to traditional vehicles.
Global Automotive Semiconductor Market: What Lies Ahead?
The internal combustion engine (ICE) has been the source of innovation and value in the 
automotive industry for a century. However, the world is now entering a new automotive age,
with cars differentiated by functionalities facilitated by electronics and semiconductors. This 
transition places semiconductors at the ‘heart’ of automotive innovation, bringing together 
the automotive, computing, and semiconductor industries. 
At the same time, this transition has significant implications, with the aforementioned 
technology-driven trends, namely connected cars, vehicle electrification, and ADAS, set to 
raise the semiconductor content in cars by ten-fold. Such developmental trends, along with 
the continual shift from direct subsidies to policy approaches that depend on regulatory 
measures like fuel economy standards and zero-emission vehicle mandates, are evaluated 
to influence the global automotive semiconductor market growth.
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FAQs:
1. Which are the key companies in the global automotive semiconductor market?
A: STMicroelectronics NV, Infineon Technologies AG, Renesas Electronics 
Corporation, NXP Semiconductors NV, etc., are among the key companies in the 
global automotive semiconductor market. 
2. Which country projects lucrative growth prospects in the global automotive 
semiconductor market?
A: India projects lucrative growth prospects in the global automotive semiconductor 
market.