“The rapid growth of electric vehicles and the increasing demand for advanced driver assistance systems are driving the Global Automotive IC Market to new heights, poised to reach a staggering $121 billion by 2031.”
The global automotive chip industry is projected to generate $121.3 billion by 2031, according to a report by Allied Market Research. In 2021, the industry generated $49.8 billion and is expected to witness a compound annual growth rate (CAGR) of 9.6% from 2023 to 2032.
The growth of the automotive chip market is driven by factors such as the increasing demand for advanced driving assistance systems (ADAS), the rise in demand for electric vehicles (EVs), and the surge in demand for autonomous driving. However, the complexity of design and high manufacturing costs are hindering the growth of the market.
Despite the challenges, there are opportunities for expansion in the automotive chip market. Increased focus on cyber security and the growing demand for connected cars are expected to drive market growth during the forecast period.
The COVID-19 pandemic had a negative impact on the automotive chip market, leading to a downturn. However, as the global situation has improved, the demand for EVs and ADAS-equipped vehicles has increased. This has resulted in automotive chip manufacturers increasing their production capacity and investing in new technologies to meet the growing demand.
In terms of product, the microcontrollers segment held the highest market share in 2021 and is expected to maintain its leadership status throughout the forecast period. The sensor segment, on the other hand, is projected to have the highest CAGR of 11.3% from 2022 to 2031.
The safety systems segment accounted for the highest market share in 2021 based on application and is estimated to maintain its leadership status throughout the forecast period. The segment is also expected to display the fastest CAGR of 10.5%. Safety systems manufacturers are utilizing advanced semiconductor technologies to meet the stringent safety requirements of the automotive chip industry.
In terms of propulsion type, ICE vehicles accounted for the largest share in 2021 and are projected to maintain the lead position during the forecast period. However, the EV segment is expected to have the highest CAGR of 16.3% from 2022 to 2031. This is due to the increase in government incentives and subsidies to encourage the adoption of EVs and reduce carbon emissions.
From a regional perspective, North America held the highest market share in terms of revenue in 2021. However, the Asia-Pacific region is projected to maintain its dominance during the forecast period. 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.
Overall, the global automotive chip industry is poised for significant growth in the coming years, driven by technological advancements and the increasing demand for advanced automotive features.