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Better-than-expected growth in global automotive
semiconductor revenue in 2020
Global automotive semiconductor revenue for 2020 is forecast to
exceed initial expectations, primarily due to an increase in the
average semiconductor value per car sold this year, according to
new analysis by IHS Markit.
IHS Markit now expects semiconductor revenue to contract in 2020
by -9.6% to just over $38 billion, which contrasts to the mid-year
view where semiconductor revenues were expected to drop 20% by year
end compared to 2019. IHS Markit continues to anticipate robust
growth in 2021 reflecting improved demand and production conditions
and especially a further uptake in electric vehicles, one factor
which has helped to boost the semiconductor market in 2020.
Two factors are driving the recovery, notably low automotive
inventory that will result in new car growth next year, combined
with stimulus packages designed to benefit the ailing car sector
while favoring the switch to electric and hybrid cars, which are
typically more expensive than equivalent internal combustion-driven
models.
Both hybrid and electric vehicles have significantly more
expensive power semiconductor content required to control
components such as traction motor inverters and DC-DC converters,
but the electrification trend also supports autonomy features and
advanced infotainment, even in the smaller car segment.
One of the impacts of COVID-19 is that it has led to an increase
of the average semiconductor value per car sold. In some parts of
Europe, for instance, the government is only providing incentives
for electrified vehicles. This differs from the "cash for clunkers"
type of initiative employed in certain regions following the 2009
financial crisis designed to get older vehicles off the road. In
many cases this favored sales of smaller, less electronically
equipped vehicles. Additionally, today's hybrid- and electric
vehicles are also fitted with more autonomy-related features and a
more advance infotainment and HMI systems, even in the lower cost
segments.
The shift in propulsion type in part created by the pandemic is
not a momentary burst and higher levels of electrification will
continue to propel the market for semiconductors well past
2021—itself a year expected to see a market-corrective
expansion of 18% over 2020. By 2026, IHS Markit forecasts the
global market for automotive semiconductors to reach $67.6 billion,
a healthy compound annual growth rate of 7% from 2019 to 2026.
