“Global Automotive Chip Market to reach a market value of USD 87.1 Billion by 2031 growing at a CAGR of 11%”
The Global Automotive Chip Market size is expected to reach $87.1 billion by 2031, rising at a market growth of 11% CAGR during the forecast period.
The Asia Pacific region generated 40% revenue share in the automotive chip market in 2023. The region is home to some of the world’s largest automotive manufacturers and a thriving electronics sector, which supports the production of automotive chips. Increased vehicle production, coupled with rising consumer demand for smart and connected vehicles, has significantly boosted the automotive chip market in this region.
The major strategies followed by the market participants are Partnerships as the key developmental strategy to keep pace with the changing demands of end users. For instance, In June, 2024, STMicroelectronics partnered with Airbus, a global pioneer in the aerospace industry, to collaborate on developing power electronics for hybrid and full-electric aircraft systems. The cooperation focuses on Silicon Carbide (SiC) and Gallium Nitride (GaN) devices, essential for powering next-generation aircraft, including urban air vehicles. This partnership will support Airbus' efforts to achieve aircraft electrification and decarbonization goals. Moreover, In August, 2024, Intel Corporation came into partnership with Karma Automotive, a vehicle manufacturer, to develop Software Defined Vehicle Architecture (SDVA) for future vehicles. This partnership would revolutionize vehicle architecture by enhancing efficiency, performance, and flexibility.
Based on the Analysis presented in the KBV Cardinal matrix; Qualcomm Incorporated and Texas Instruments, Inc. are the forerunners in the Automotive Chip Market. In August, 2024, Qualcomm Technologies partnered with Samsung to produce advanced chips for automotive applications, specifically enhancing in-vehicle infotainment and driver-assistance systems. This collaboration features Samsung's LPDDR4X memory chip certified for Qualcomm's Snapdragon Digital Chassis, powering premium infotainment and driver-assistance features in future vehicles. Companies such as STMicroelectronics N.V., Infineon Technologies AG, NXP Semiconductors N.V. are some of the key innovators in Automotive Chip Market.
The increasing demand for in-vehicle infotainment (IVI) systems is primarily driven by integrating advanced technologies in modern vehicles. Consumers expect more than just basic functionalities; they seek enhanced features such as navigation, connectivity, entertainment, and personalized user experiences. This shift has necessitated sophisticated semiconductor chips that enable various functionalities, such as high-resolution displays, audio processing, and connectivity options like Bluetooth, Wi-Fi, and 5G. Thus, rising demand for in-vehicle infotainment systems drives the market's growth.
Additionally, The growing concern for vehicle safety has led to a significant increase in the adoption of Advanced Driver Assistance Systems (ADAS). These systems' real-time data processing and decision-making capabilities, encompassing functions such as lane-keeping assistance and adaptive cruise control, largely depend on sophisticated semiconductor chips. As consumers prioritize safety, the demand for ADAS-equipped vehicles drives growth in this market. Therefore, the increasing adoption of advanced driver assistance systems (ADAS) is propelling the market's growth.
The production of these chips involves complex fabrication processes that require advanced technology and specialized equipment. These processes often entail high initial capital outlay for semiconductor fabrication facilities (fabs), which can cost billions of dollars to establish. The sophisticated manufacturing techniques needed to produce reliable chips for automotive applications further drive up production costs, limiting the number of companies that can enter the market. Hence, high manufacturing costs and capital investments impede the market's growth.
The leading players in the market are competing with diverse innovative offerings to remain competitive in the market. The above illustration shows the percentage of revenue shared by some of the leading companies in the market. The leading players of the market are adopting various strategies in order to cater demand coming from the different industries. The key developmental strategies in the market are Partnerships, Collaborations and Agreements.
Based on type, this market is divided into analog ICs, microcontrollers & microprocessors, logic ICs, and others. In 2023, the analog ICs segment held 28% revenue share in this market. Analog ICs are crucial for a wide range of automotive applications due to their ability to process real-world signals such as temperature, speed, and pressure, which are essential for vehicle operation and safety. These chips convert these analog signals into digital data that can be processed by a vehicle's electronic systems.
On the basis of application, this market is segmented into chassis, powertrain, safety, telematics & infotainment, and body electronics. In 2023, the safety systems segment attained 22% revenue share in this market. This area is critical for ensuring passenger and pedestrian safety through advanced driver-assistance systems (ADAS), airbag control systems, and anti-lock braking systems (ABS). The increasing emphasis on vehicle safety, driven by regulatory requirements and consumer expectations, has led to heightened investments in safety technologies, further boosting demand for these chips in this segment.
By vehicle, this market is divided into passenger vehicles and commercial vehicles. The commercial vehicles segment procured 40% revenue share in this market in 2023. This category includes trucks, buses, and other vehicles used for transporting goods and services. Increasing investments in fleet management technologies drive demand for chips that support commercial vehicles' telematics, navigation, and communication systems.
Free Valuable Insights: Global Automotive Chip Market size to reach USD 87.1 Billion by 2031
The automotive chip market, excluding top key players, remains highly competitive with numerous smaller and regional companies vying for market share. These players focus on niche segments, offering specialized solutions in sensors, power management, and connectivity. Innovation, cost-efficiency, and partnerships with OEMs are crucial for gaining a competitive edge.
Region-wise, this market is analyzed across North America, Europe, Asia Pacific, and LAMEA. In 2023, the North America region witnessed 28% revenue share in this market in 2023. This can be attributed to several factors, including the presence of major automotive manufacturers and suppliers, strong demand for advanced vehicle technologies, and a growing emphasis on safety and connectivity features. The region’s innovation and research & development leadership has driven the adoption of cutting-edge automotive chips, particularly in advanced driver-assistance systems (ADAS) and infotainment solutions.
| Report Attribute | Details |
|---|---|
| Market size value in 2023 | USD 38.4 Billion |
| Market size forecast in 2031 | USD 87.1 Billion |
| Base Year | 2023 |
| Historical Period | 2020 to 2022 |
| Forecast Period | 2024 to 2031 |
| Revenue Growth Rate | CAGR of 11% from 2024 to 2031 |
| Number of Pages | 269 |
| Number of Tables | 383 |
| Report coverage | Market Trends, Revenue Estimation and Forecast, Segmentation Analysis, Regional and Country Breakdown, Competitive Landscape, Market Share Analysis, Porter’s 5 Forces Analysis, Company Profiling, Companies Strategic Developments, SWOT Analysis, Winning Imperatives |
| Segments covered | Type, Application, Vehicle, Region |
| Country scope |
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| Companies Included | NXP Semiconductors N.V., Infineon Technologies AG, Texas Instruments, Inc., STMicroelectronics N.V., Renesas Electronics Corporation, ON Semiconductor Corporation, Qualcomm Incorporated (Qualcomm Technologies, Inc.), Intel Corporation, ROHM Co., Ltd., and Microchip Technology Incorporated |
By Type
By Application
By Vehicle
By Geography
This Market size is expected to reach $87.1 billion by 2031.
Rising Demand For In-Vehicle Infotainment Systems are driving the Market in coming years, however, High Manufacturing Costs And Capital Investments restraints the growth of the Market.
NXP Semiconductors N.V., Infineon Technologies AG, Texas Instruments, Inc., STMicroelectronics N.V., Renesas Electronics Corporation, ON Semiconductor Corporation, Qualcomm Incorporated (Qualcomm Technologies, Inc.), Intel Corporation, ROHM Co., Ltd., and Microchip Technology Incorporated
The expected CAGR of this Market is 11% from 2024 to 2031.
The Telematics & Infotainment segment led the maximum revenue in the Market by Application in 2023, thereby, achieving a market value of $20.6 billion by 2031.
The Asia Pacific region dominated the Global Automotive Chip Market by Region in 2023, and would continue to be a dominant market till 2031; thereby, achieving a market value of $36.2 billion by 2031.
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