As consumer market demand gradually recovers, global automobile shipment is expected to reach 83.5 million units in 2021, according to TrendForce’s latest investigations. As well, component procurement activities from major automakers and tier 1 suppliers have generated an increase in automotive semiconductor demand in 4Q20. Global automotive IC revenue is expected to reach US$18.67 billion in 2020 and $21 billion in 2021, a 12.5% increase YoY.
TrendForce analyst C.Y. Yao indicates that the automotive IC industry has been impacted by the China-U.S. trade war and the COVID-19 pandemic this year. On the supply side, factories worldwide were forced to suspend operations due to the pandemic in early 2020, while on the demand side, anti-pandemic measures such as stay-at-home orders have massively lowered the general public’s purchasing demand for vehicles. In addition, supply chain disruptions also forced automakers worldwide to push back the release of new models, further damaging the automotive market.
Nevertheless, despite the severe challenges facing the automotive market, major automotive semiconductor companies are still actively undertaking R&D activities and expanding in the automotive IC market, primarily because of the relatively long certification time required for newly developed automotive ICs. Furthermore, various automakers each need to meet their own respective certification standards. Any semiconductor company that enters the market ahead of its competitors therefore stands a better chance at becoming part of the supply chain for new car models to be released after 2023. Some examples of these preemptive efforts include the partnership between NXP and TSMC to develop 5nm automotive processors, as well as automotive microcontrollers developed jointly by STMicroelectronics and Bosch. Likewise, after Infineon acquired Cypress, Cypress’ NOR Flash and MCU product portfolios enhanced the comprehensiveness of Infineon’s automotive solutions.
On the whole, V2X, ADAS, self-driving cars, and EVs have become not only inevitable trends of automotive development, but also key growth drivers of automotive semiconductors. Whether companies can succeed in the automotive market will depend on their pace of advanced process adoption and their control over production capacities for automotive power semiconductors. TrendForce further indicates that, as the semiconductor industry is constrained by the shortage of foundry capacities, which is unlikely to be resolved in the short run, the automotive semiconductor market is expected to face a similar shortage as well. Therefore, IDMs with in-house wafer fabs will have a competitive advantage in the industry going forward.