Automotive Integrated Circuits (ICs) Market Growth to US$ 162.35 Billion by 2031: Future Trends and Industry Insights

Automotive Integrated Circuits (ICs) Market Size, Share and Analysis

The Automotive Integrated Circuits (ICs) Market is poised for significant growth, projected to reach US$ 162.35 billion by 2031, with a robust compound annual growth rate (CAGR) of 9.9% from 2025 to 2031. The surge in demand for connected cars and the increasing focus on environmentally friendly vehicles are pivotal trends driving this growth.

Automotive Integrated Circuits (ICs) Market Analysis

Automotive ICs serve as the backbone of modern vehicle technology, allowing manufacturers to integrate multiple functionalities onto a single chip. This not only enhances performance but also ensures safety in driving. The growing demand for hybrid and electric vehicles has further accelerated the automotive IC market, as these vehicles require advanced electronic systems for optimal performance.

Automotive Integrated Circuits (ICs) Market Overview

Automotive ICs are specifically designed for various applications within vehicle systems, playing a critical role in vehicle design and functionality. The expansion of the automotive industry has created a fertile ground for automotive ICs, which are categorized by type, application, and vehicle type. The increasing adoption of innovative technologies in vehicles has significantly contributed to market growth. Integrated circuits are essential in vehicle control units, facilitating actuator movements, handling information, and ensuring safety for consumers.

Automotive Integrated Circuits (ICs) Market Drivers and Opportunities

Increase in Automobile Production

The global automotive production has witnessed a remarkable increase, reaching approximately 93.5 million units in 2023, an 8.6% rise from the previous year, according to the International Organization of Motor Vehicle Manufacturers (OICA). This growth in production is a crucial driver for the automotive IC market, as more vehicles necessitate advanced electronic components.

Rise in Electric Vehicles and Autonomous Cars

The surge in electric vehicle sales, bolstered by government initiatives, presents substantial opportunities for market growth. In 2023, electric car sales reached around 14 million units, as reported by the International Energy Agency (IEA). The growing demand for electric and autonomous vehicles, combined with significant innovations in the automotive sector, is expected to further propel the market. The integration of advanced technologies such as AI, IoT, and machine learning is also enhancing the demand for automotive ICs. For instance, KPN IoT and Freeeway IoT recently launched an integrated IoT monetization platform aimed at generating recurring revenue from connected cars in Europe.

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Automotive Integrated Circuits (ICs) Market Segmentation Analysis

The automotive IC market can be segmented into key categories:

Automotive Integrated Circuits (ICs) Market Share Analysis by Geography

• North America (US, Canada, Mexico)
• Europe (UK, Germany, France, Russia, Italy, Rest of Europe)
• Asia-Pacific (China, India, Japan, Australia, Rest of Asia-Pacific)
• South and Central America (Brazil, Argentina, Rest of South and Central America)
• Middle East and Africa (South Africa, Saudi Arabia, UAE, Rest of Middle East and Africa)

Key Players in the Automotive Integrated Circuits (ICs) Market

The competitive landscape of the automotive IC market features several key players, including:

• Intel Corporation
• Samsung Electronics Ltd.
• Robert Bosch GmbH
• Qualcomm
• Renesas Electronics Corporation
• Infineon Technologies AG
• STMicroelectronics
• ROHM CO. LTD.
• Texas Instruments
• NXP Semiconductors

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Future Outlook

The future of the automotive IC market looks promising, driven by continuous advancements in technology and the increasing demand for smart, connected vehicles. As automakers innovate to enhance safety, efficiency, and user experience, the reliance on sophisticated ICs will grow. The integration of emerging technologies such as 5G connectivity and artificial intelligence will further transform the automotive landscape, creating new opportunities for market players. With the shift towards sustainable transportation, the automotive IC market is set to play a vital role in the evolution of the automotive industry over the next decade.

Frequently Asked Questions (FAQs) 

What are Automotive Integrated Circuits (ICs)?

Automotive ICs are semiconductor devices specifically designed for vehicle applications, including power management, infotainment systems, ADAS, body electronics, and drivetrain control.

Which vehicle segment contributes the most to market growth?

Passenger vehicles account for a significant share due to higher production volumes and increasing adoption of advanced electronic systems. However, electric vehicles are expected to witness the fastest growth.

How is electrification impacting the Automotive IC Market?

Vehicle electrification significantly increases semiconductor content per vehicle, particularly for battery management systems, powertrain control, and charging infrastructure.

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