Automotive IC market set to grow 12 percent in 2011

SCOTTSDALE, USA: The rapid motorization of China and other emerging markets along with recovery in the US automotive market, coupled with growing demand for on-board electronics, will help propel the automotive IC market up 12 percent in 2011, to $17.2 billion. This follows a 45 percent increase in automotive IC sales in 2010 (Fig. 1), which halted a two-year slide in the automotive IC market.

According to the 2011 edition of IC Insights' IC Market Drivers report, global shipments of new cars are expected to rise almost 5 percent in 2011 to 55.8 million units. The US auto market is emerging from its recessionary downturn. Meanwhile, sales of new cars in China outpaced new car shipments in the US by 50 percent in 2010--a trend that is expected to continue through mid-decade!

Fig: 1Source: IC Insights, USA.

Automobiles are a fertile environment to implement new and innovative electronic systems and ICs. Many of these systems are competitive selling points for automakers. Growth drivers for ICs over the next several years include active safety and telematics systems, communications and entertainment convergence, and "green" initiatives such as energy savings and reduced emissions. These technologies are increasingly available as standard equipment on new cars across all price ranges.

In the area of safety and telematics, systems such as self parking, active cruise control, lane departure warning systems, and electronic stability control--ESC, have been widely implemented in Japan and Europe. Some of these systems will soon be required for all new cars sold in the US. An ESC system typically consists of three sensors--a gyroscope, an accelerometer, and a pressure sensor--all of which can be made using a microelectromechanical system (MEMS) process.

Highlighting the move to convergence, automakers are testing systems that will allow smartphones to dock with a large display on the car's center console allowing the driver to access the Internet, listen to his or her stored music, and send text messages through a large, onboard touchscreen rather than using the phone itself, and essentially replacing radio/CD/nav systems on cars sold today.

Shipments of electric and hybrid vehicles, which only a few years ago were counted on to boost automotive IC sales, are not expected to be a significant contributor to the automotive IC market in the immediate future. In fact, relatively stable gasoline prices led to a decline in hybrid vehicles sales in 2010. Shipments of hybrid and electric vehicles are forecast to increase a modest 8 percent in 2011.

Through 2014, the automotive IC market is forecast to grow to $20.9 billion, representing an average annual increase of 14.5 percent per year from 2009 to 2014. That growth rate tops the IC growth rate in all other system markets including computer (11.7 percent), communications (8.1 percent), and consumer (10.6 percent) systems, and the total worldwide IC market (10.6 percent) over the same timeperiod.