Global automotive IC revenue is expected to grow 12.5 percent year-on-year in 2021, according to Trendforce. This will be a welcome reprieve after a hard year for most automotive chipmakers, which were heavily impacted by the China-US trade war and the Covid-19 pandemic. NXP, for example, saw its automotive revenue sequentially drop 32 percent in Q2. But the Eindhoven-based company rebounded nicely in Q3 and expects to continue to regain momentum into the current quarter and next year.
Trendforce notes that 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. 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.
The key growth drivers of automotive semiconductors are V2X, ADAS, self-driving cars and EVs. 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 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.
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