Automotive industry set to propel semiconductor demand, says SIA
19 Mar 2024
The automotive industry will continue to be an important sector propelling semiconductor demand through the decade, according to the US-based Semiconductor Industry Association (SIA).
In a blog post on Monday, SIA director of industry statistics and economic policy Robert Casanova said innovation in vehicle electrification, autonomy, and connectivity requires greater chip content in vehicles.
He said the current generation of cars, including electric vehicles, can have between 1,000 and 3,500 semiconductors.
“This number is expected to grow as consumers continue to prioritise advancements in vehicle safety systems (like advanced driver assistance systems), vehicle connectivity, and electrification when choosing a car.
“Despite the downturn in the global semiconductor market in 2023, demand for chips in the long term is expected to show vibrant growth,” he said.
Casanova said that in fact, World Semiconductor Trade Statistics (WSTS) projects double-digit market growth in 2024.
“And, to meet this growing demand, our industry has recently committed to expanding manufacturing capacity in the US through private investments of over US$250 billion (RM1.18 trillion) thus far,” he said.
Reviewing the past year, Casanova said that after reaching a record total of US$574.1 billion in chip sales in 2022, the chip industry experienced an 8.2% decline in global revenue to US$526.9 billion in 2023 due to normal market cyclicality.
He said that by the second half of last year, however, the industry experienced consistent month-on-month and year-on-year increases in sales, signaling the start of the current cycle.
Casanova said fuelling the rebound in the second half of last year were increased sales to the automotive and industrial sectors, and growing demand for a range of chips that are critical to artificial intelligence systems.
He said the increased sales to these sectors resulted in shifts to end markets’ share of global sales revenue.
“Newly released data on 2023 semiconductor sales by broad product category, known as ‘end use’, revealed which markets saw the largest sales increases,” he said.
Casanova said that historically, the PC/computer and communications end markets accounted for approximately two-thirds of overall sales, with sectors such as automotive, industrial, and consumer electronics accounting for the remainder.
But he said the breakdown of sales by the end market had shifted in recent years, and that trend continued in 2023.
He explained that according to the 2023 Semiconductor End-Use Survey by the WSTS, the PC/computer and communications end markets still accounted for the largest share of semiconductor sales in 2023.
“Sales to the communications industry, however, increased by two percentage points, while PC/computer decreased to 25% of sales.
“Meanwhile, the automotive sector experienced the largest growth in share of chip sales to become the third-largest end market in 2023,” he said.
Source: The Edge Markets
