2022 Global Automotive MCU Market Grows 11.4% YoY to Reach US$8.286 Billion

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The global new energy vehicle (NEV) industry has grown by leaps and bounds over the past two years, especially in Chinese markets where 6.46 million NEVs were sold in 2022 — an impressive 89.5% YoY growth. The penetration rate of NEVs jumped from 14.3% in 2021 to 25.6% in 2022.

The global automotive MCU industry has also grown hand in hand, largely in part due to the explosive growth of NEVs and their tight supply-demand relationship. In 2022, the global automotive MCU market generated US$8.286 billion in revenue — an 11.4% YoY growth. Looking ahead to 2023, the market is predicted to grow 4.35%, reaching a value estimation of US$8.646 billion as a result of continued market expansion and technological advancements in the NEV industry.

Automotive MCUs to undergo a technological and demand revolution

More advanced NEVs will demand higher processing power from MCUs, requiring them to bear heavier performance loads. Foundries such as NXP, Renesas, and Infineon are working to improve the performance of their automotive MCUs through a two-pronged approach: Upgrading the manufacturing process and testing out new forms of storage to prevent a performance bottleneck.

Demand for automotive MCUs will be significantly boosted in the short term as NEVs become more intelligent, functional, complex, and comfortable. In the long-term, the electrical architecture of NEVs plans to shift from a decentralized to a more centralized design, consolidating multiple functions into one domain controller. While this will increase performance loads for MCUs, it also means a fewer number will be needed.

Chinese automotive MCU market experiences boom as domestic production ramps up in the face of a global shortage

China’s automotive MCU market has rapidly expanded in the past three years due to two factors: First, a global shortage has provided Chinese manufacturers an opportunity to break into the market. Especially since China is the world’s largest producer of NEVs, which translates to a higher demand for MCUs than any other region. In the past year alone, 16 Chinese manufacturers have launched their own MCUs; while some are currently in the certification process, others have already entered production.

Second, in the midst of a domestic production boom, an increasing number of Chinese automakers have switched to using domestic MCUs. Domestic NEVs account for more than half of China’s market share, providing Chinese MCU manufacturers with more opportunities to cooperate with Chinese automakers. A number of Chinese automakers have even begun investing in domestic MCU manufacturers.

Over the past three years, the rapid expansion of China’s automotive MCU industry has helped them gain a competitive edge within the market. In the mid- to long-term, China’s MCU market will continue to grow thanks to ramped up domestic production and a thriving NEV market.