Most of the segments in which semiconductors are used will recover in the second half of 2024, but unevenly, according to the latest quarterly report by S&P Global Market Intelligence. What are the analysts' forecasts for the automotive semiconductor market?
The automotive semiconductor market is valued at billions of dollars. According to a report by Straits Research, the global automotive semiconductor market revenue was estimated at USD 42.08 billion in 2021 and is projected to reach USD 72.43 billion by 2030, with a CAGR of 6.22 per cent from 2022 to 2030.
The turbulence caused by the COVID-19 pandemic in the automotive semiconductor market seems to have come to an end. What is happening in the industry now and what are analysts’ forecasts?
It is difficult to overestimate the importance of semiconductors for the automotive industry. They are used in various automotive systems, including powertrains, safety technologies, transport telematics, driver assistance systems (ADAS), infotainment systems, etc.
According to the consensus forecast of financial analysts, revenues of the top ten chipmakers grew by 44 per cent year-on-year in the first quarter of 2024, but are expected to slow to 24 per cent by early 2025.
The supply chain of semiconductors from mainland China, which is developing its own domestic chip manufacturing capacity, is affected by US and EU export controls and is a significant obstacle to recovery.
Uneven recovery in different segments Semiconductor-using segments are recovering at different rates, as evidenced by international trade data. The total value of exports of consumer goods that require semiconductors fell by 0.6 per cent.
The automotive and industrial equipment sectors are not performing as well, although the S&P Global Manufacturing Purchasing Managers’ New Orders Index provides some optimism, showing growth in May 2024 for the first time since March 2023. While in April the index stood at 46.4, in May this year it reached 50.7.
The industrial equipment industry has historically lagged behind other electronic equipment sectors, with capital expenditure rising later in the economic cycle than for other goods. In addition, industrial capital investment is being hampered by higher interest rates and the difficulty of customs clearance for chips.
The decline in demand for electric vehicles is also creating problems for chip suppliers and slowing the recovery in this segment.
However, the rapid development of automotive technology requires new and sophisticated semiconductors. And increasingly stringent vehicle safety regulations are also driving demand for automotive semiconductors.
These factors suggest that the automotive semiconductor market is poised for significant growth in the coming years.
In addition, the demand for autonomous driving technologies is constantly increasing, so the demand for innovative and reliable automotive semiconductors will continue to grow.
