Automotive Chip Market Research Report - Industry Analysis and Forecast to 2025

Posted by Marsh William on August 30th, 2018

The global Automotive Chip Market is expected witness a rapid expansion over the forecast period. Rising computerization and digitization of automotive parts are anticipated to fuel the industry growth. In addition, rapid incorporation of Engine Control Unit (ECU) in modern automobiles is also expected to augment the market demand over the next few years. These chips are required to monitor and control various functions of a vehicle as they use algorithms to direct the part to operate in a particular manner. Technological developments in the automobile industry have led to an active involvement of computers in the operations of automotive engines.

Manufacturers are harnessing the power of digital control equipment leading to high-performance delivery of automobiles. Ongoing research to discover the innovative use of automotive chip may act as a key factor for increasing the product demand. Manufacturers such as Renesas Electronics Corporation and NXP are actively eyeing automobile brands at collaborative manufacture initiatives. It follows a declining demand from the computer industry and manufacturers are now aiming at exploiting the growing automotive chip market. However, with only a few key players directing the market dynamics, the smaller companies may face challenges to sustain.

Manufacturers such as ARM Holdings, generating more than 40% revenue from smartphone industry, are actively developing products that may be required in future by the automobile industry. However, with elongated design cycles, the industry is still in pre-nascent stage and may begin rolling out products only after a few years. Further, the collaborative efforts of automobile manufacturers and chip makers are expected to fuel demand over the forecast period. The market can be segmented by type into after-market and Original Equipment Manufacturer (OEM) products. While the OEM sector accounts for a healthy growth, due to active development stage activities, the after-market sector is poised to witness a substantial growth over the forecast period.

This growth may be attributed to increasing demand from the Asia-Pacific region where cost-effective after-market solutions are widely available and future demand for these components is expected to be high. The advent of hybrid vehicles and self-driven cars is also expected to spur demand owing to extensive computer-based operating systems used in them. The industry depends heavily on the global automobile production. Since most chip manufacturers are entering into agreements with automakers, smaller companies are facing challenges to sustain in the market, impeding the overall industry growth. However, with the varying product features, firms may develop competency for specific components, imposing market growth.

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