According to Yole Group’s new 2024 Automotive Semiconductor Trends report, the automotive semiconductor market is expected to reach nearly $100 billion by 2029, with a compound annual growth rate from 2023 to 2029. (CAGR) is equivalent to 11%. This growth highlights the sector’s critical role in enabling next-generation vehicles, with the value of semiconductor devices per car expected to rise from approximately USD 590 in 2023 to USD 1,000 by 2029. has been.
ADAS (Advanced Driver Assistance Systems) and safety features are driving this surge and are expected to grow at a CAGR of 14%. Electrification has followed suit, with a CAGR of over 13% over the same period. Despite the slow adoption of electrification in Europe, the Chinese market remains very active and maintains global momentum.
“The global automotive market is growing slowly, and some OEMs and suppliers are finding it more difficult amidst the transformation. However, in the medium term there is still a significant 11% increase in growth, reaching almost $100 billion in 2029,” Yole Group’s principal analyst for automotive semiconductors said in a press release.
In 2020, consulting firm Deloitte said in a report that electronics accounted for 40% of a car’s total cost, compared to 18% a little more than two decades ago, and this proportion has increased due to ongoing electrification. It is expected that this will increase as a result.
Changes in OEM strategy
Yole’s report reveals a notable shift in automotive OEMs (original equipment manufacturers) becoming more involved upstream in the semiconductor supply chain. Power modules, which are a key enabler of EVs, are a prime example. As Yole points out, almost all Chinese OEMs are investing in this space in one form or another. Additionally, our high-performance processors and MCUs are also highly valued by OEMs.
Yole Group’s report highlights several key trends moving the semiconductor market forward.
For example, power electronics. Demand for SiC MOSFET modules, essential for efficient power conversion, is being driven by the growing appeal of EVs. Advanced 16nm and 10nm MCUs will be essential to ADAS applications, supporting the transition to radar, sensors, and domain and zone controllers. As vehicles move beyond Level 3 and achieve greater autonomy, the demand for robust computing and memory capabilities will increase.
“Currently, the value of semiconductor devices on the market will be approximately USD 590 per car in 2023. As this figure grows to approximately USD 1,000 per vehicle, semiconductor technology and its latest innovations will become essential. At Yole Group, we are focused on key trends related to ADAS and electrification,” said Pierrick Boulay, Senior Technology & Market Analyst at Yole Group.
Evertiq has invited Pierrick Boulay to speak on how semiconductors are shaping the future of cars at the Expo in Sophia Antipolis on February 6, 2025.
Despite slowing growth in the global automotive market, the medium-term outlook for semiconductor devices remains positive, with the number of devices per car expected to rise from approximately 834 devices in 2023 to 1,106 devices by 2029. is predicted to increase significantly. As mentioned earlier, this growth is primarily driven by increased implementation. Promoting ADAS and vehicle electrification. Although semiconductor supply has improved compared to recent years, OEM strategies vary by industry segment and region and remain a major concern.
As a result, to overcome the limitations of traditional distributed systems, automakers have begun to centralize functionality into fewer and more powerful electronic control units (ECUs). This centralization simplifies wiring and improves performance, but creates new challenges in managing more complex systems.
