The full impact of COVID-19 in economic and supply chain disruption terms, remains a dynamic variable that will dictate automotive semiconductor demand in the near term. The Strategy Analytics Powertrain Body Chassis and Safety (PBCS) service report, “Automotive Semiconductor Demand Forecast 2018 - 2027 (http://sa-link.cc/1pC),” predicts that the automotive semiconductor market will contract by almost 7% in 2020 in a baseline scenario.

Electrified powertrains and safety systems will underpin a return to growth as well as longer term opportunities, collectively growing at a CAAGR (compound annual average growth rate) of over 13 percent over the 2019 – 2024 timeframe and accounting for over 50 percent of the automotive semiconductor market in 2024.

“Automotive Semiconductor Demand Forecast 2018 - 2027” uses a “bottom-up” methodology to derive demand from the penetration rates and volumes in vehicle production, by region, of the main powertrain, safety, chassis, body and driver information systems and typical semiconductor component application. The report provides detailed analysis of global semiconductor unit and revenue opportunities in Powertrain, Chassis, Safety, Body and Driver Info domains for the key regional markets., as well as detailing demand major product component categories.

• Within the Powertrain domain, expanding OEM offerings of BEV/HEV models is driving high levels of semiconductor growth, particularly for power and battery management components.
• Safety domain growth is driven by a combination of rapid ADAS (advanced driver assistance systems) adoption in premium and mid-range vehicles and continuing penetration growth of passive safety systems in emerging markets.
• AFS (adaptive front lighting) Matrix, LED front lighting, Gateway Modules and NFC enhanced passive keyless entry systems will be the bright spots for the body domain.
• In the chassis domain, penetration of major chassis systems such as electric power steering and ABS/VSC have already achieved high penetration thereby limiting overall semiconductor growth. However, there are some notable areas of growth in the areas of braking.
• Fully flat panel and high-end hybrid primary instrumentation clusters are the high growth drivers for semiconductor demand in the Driver Information domain, as vehicle OEMs compete to differentiate the look and feel of their products through innovations in the clusters and A/V infotainment systems. Cockpit-domain controller concepts will also begin to positively impact driver information architectures and semiconductor requirements in the mid-term.

There is no doubt that COVID-19 will significantly impact automotive semiconductor demand in 2020, with recovery hampered by a staggered return to normal vehicle production across the major vehicle production regions. On a positive note, the automotive semiconductor industry was already riding a wave of demand from electrification and ADAS (Advanced Driver Assistance Systems) technologies pre-COVID-19. This will support the industry in its return to normalcy, albeit at a lower baseline, as well as drive up the average semiconductor content per vehicle through 2027. 

Check out the report (subscription required) “Automotive Semiconductor Demand Forecast 2018 - 2027” for the full analysis and thanks for reading!

Feel free to contact me if you want to discuss this post and the underlying questions raised. For more information on Strategy Analytics’ extensive coverage of the automotive industry, take a look at the PBCS (Powertrain, Body, Chassis & Safety), AVS (Autonomous Vehicles Service), AIT (Automotive Infotainment and Telematics) and ACM (Automotive Connected Mobility) services.