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Automotive electronic market to hit Rs.78,452.93 crore

Posted: 21 Jul 2010     Print Version  Bookmark and Share

Keywords:automotive electronics  semiconductors  cutting-edge systems 

Despite the rising popularity of smaller, less sophisticated cars, the automotive electronic is still forecast to grow over the next 7 years according to a new study by IMS Research. It forecasts that the market for semiconductors in under-the-hood and body electronics will grow from Rs.48,099.12 crore ($10.3 billion) in 2010 to Rs.78,452.93 crore ($16.8 billion) in 2017, mainly due to the use of semiconductors in new cutting-edge systems.

In India, China and other emerging markets, there is a growing market for smaller, simpler cars that suit a lower budget. As these regions are the fastest growing, the smaller car segment will drive much of the growth in global vehicles sales. This means that the average car size worldwide is reducing. Smaller cars have fewer high-end features and use fewer semiconductors. Therefore, this trend has a negative effect on semiconductor revenue.

However, there are two other trends that work in the opposite direction. The first is a trend that has been ongoing for decades: mechanical parts being replaced by electronic parts as semiconductors become less costly. IMS Research analyst Jamie Fox explained that there is a second important trend: "New systems and features, such as electric seats, passive and active cruise control, adaptive headlights and self parking systems, are being fitted to more and more cars, and most of these require considerable semiconductor content." Many of these systems are far from reaching a level of saturation and other systems, such as "by-wire" systems, are likely to be introduced in the longer term so there is no immediate prospect of a plateau being reached in terms of the fitment of new systems and features.

These two long-term trends mean that, despite the move to smaller vehicles, Fox forecasts growth in the average semiconductor revenue per car from Rs.7,845.29 ($168) in 2010 to Rs.9,292.94 ($199) in 2017. Therefore, provided that vehicle sales grow the semiconductor market will also show positive growth. Following the decline in vehicle sales in the fourth quarter of 2008 and first half of 2009, volumes recovered strongly at the end of 2009 and start of 2010. The current projection for vehicle sales is for steadier growth worldwide from 2010 to 2017, driven by developing regions.





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