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Automotive IC Market Set to Grow 12 Percent in 2011

SCOTTSDALE, AZ — The rapid motorization of China and other emerging markets along with recovery in the U.S. automotive market, coupled with growing demand for on-board electronics, will help propel the automotive IC market up 12% in 2011, to $17.2 billion.

This follows a 45% increase in automotive IC sales in 2010, 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% in 2011 to 55.8 million units. The U.S. auto market is emerging from its recessionary downturn. Meanwhile, sales of new cars in China outpaced new car shipments in the U.S. by 50% in 2010–a trend that is expected to continue through mid-decade!

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 U.S. 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% in 2011. Through 2014, the automotive IC market is forecast to grow to $20.9 billion, representing an average annual increase of 14.5% per year from 2009 to 2014. That growth rate tops the IC growth rate in all other system markets including computer (11.7%), communications (8.1%), and consumer (10.6%) systems, and the total worldwide IC market (10.6%) over the same time period.

IC Insights

3 comments on “Automotive IC Market Set to Grow 12 Percent in 2011

  1. saranyatil
    March 6, 2011

    Innovations has been emerging in all the fields, leading to an increase in demand for IC's. Many automation companies are targeting to produce electric vehicles in the next years this will be the main reason for increase. now a days everythin needs to be automated to provide comfort and also to add many features. always people are fearing of burglary already there are lot of new ideas have built on to the system but with addition of smart electronics will add lot of value.

  2. Nemos
    March 11, 2011

    I didn't expect that the stable oil price will lead to decrease the sales of Hybrid and Electric cars,This is something to be concerned us. I really impressed with the fact that new cars will be equipped with electronic system guide and with these tree new sensors (gyroscope , amazing) . We have a lot to expect from Automotive Ic Market……

  3. hwong
    March 22, 2011

    Currently Europe and China are more advance than U.S. in terms of hybrid cars development. We'll need to catch up with the technology and standards setting. The thing is, it's easier for other countries to implement because they have friendly energy policies that U.S. doesn't have.

    But that would mean the IC auto business shall grow for the North American market.

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