Automotive Self-Driving Chip Market

The Automotive Self-Driving Chip Market for car is a rapidly growing field that is central to the development and advancement of autonomous vehicles. These specialized semiconductors are the brains of self-driving technology, allowing vehicles to process massive amounts of data in real time, navigate complex environments and make smart decisions. As the automotive industry moves towards automation, the demand for more efficient and effective self-driving chips will increase. This market is driven by innovations in artificial intelligence, machine learning and advanced sensor integration that promise safer and more reliable autonomous driving solutions. Thanks to significant investment from leading technology companies and automakers, the automotive self-driving chip market is poised for significant growth that will shape the future of transportation.

Automotive Self-Driving Chip Market valued at $64 Billion in 2023 and projected to reach $139 Billion by 2032, growing at an 11.8 % CAGR

Automotive Self-Driving Chip Market

Size, by Product, - (USD Billion)

System on Chip (SoC)

Microcontroller Unit (MCU)

Application-Specific Integrated Circuit (ASIC)

Field-Programmable Gate Array (FPGA)

Other Products

The Market will Grow

At the CAGR of:

11.8%

The Forecast Market

Size for in USD:

$139 Billion

Market Overview:

The Global Automotive Self-Driving Chip Market is witnessing significant growth, fueled by advances in autonomous vehicle technology and growing consumer demand for safer and more efficient transportation. This multi-billion-dollar market includes a variety of semiconductor solutions needed to power the complex algorithms and processing tasks required for autonomous driving. Key players include major technology companies such as NVIDIA, Intel, and Qualcomm, as well as major automakers that are investing heavily in self-driving technologies. Regionally, North America and Europe dominate the market due to early adoption and significant R&D investments. The Asia-Pacific region, especially China and Japan, is rapidly emerging as a major player driven by government initiatives and a growing automotive industry. The market is characterized by strategic partnerships, mergers and acquisitions aimed at improving technological capabilities and expanding market share. As regulatory frameworks evolve and technology matures, the global automotive self-driving chip market is poised for explosive growth that will change the automotive landscape.

Key players:

• NVIDIA
• Intel
• Qualcomm
• Tesla
• NXP Semiconductors
• Texas Instruments
• Xilinx
• Renesas Electronics
• Infineon Technologies
• Samsung Electronics
• Micron Technology
• Mobileye (an Intel company)
• ARM Holdings
• STMicroelectronics
• Huawei
• Advanced Micro Devices (AMD)
• MediaTek
• Marvell Technology Group
• Bosch
• Ambarella

Market Segmentation:

By Type:

System on Chip (SoC)

Microcontroller Unit (MCU)

Application-Specific Integrated Circuit (ASIC)

Field-Programmable Gate Array (FPGA)

By Application:

Autonomous Vehicles

Driver Assistance Systems

In-Vehicle Networking

Telematics

By Level of Autonomy:

Level 1 (Driver Assistance)

Level 2 (Partial Automation)

Level 3 (Conditional Automation)

Level 4 (High Automation)

Level 5 (Full Automation)

By End User:

Original Equipment Manufacturers (OEMs)

Automotive Component Manufacturers

Tech Companies

Research and Development Institutions

By Geography:

North America

Europe

Asia-Pacific

Latin America

Middle East & Africa

Automotive Self-Driving Chip Market

Share, by end user, (USD Billion)

64 Billion%

Original Equipment Manufacturers (OEMs)

Automotive Component Manufacturers

Tech Companies

Research and Development Institutions

Other End-Users

139 Billion

Total Market Size

USD (Billion),

11.8%

CAGR

-

Market Dynamics:

Trends:

Growth of Electric Vehicles (EVs): The growing popularity of electric vehicles is increasing the demand for self-driving chips in cars as electric cars have more and more autonomous driving capabilities.

Rapid technological development: Continuous innovation in artificial intelligence, machine learning and sensor technologies is leading to the development of more advanced self-driving chips that enable better performance and safety.

The focus on connectivity is growing: the integration of self-driving chips into advanced connectivity solutions such as 5G and V2X communication is more common, facilitating real-time data exchange and improving the capabilities of autonomous driving.

Moving to 4th and 5th autonomy: there is a noticeable trend towards greater autonomy and manufacturers are focusing on developing self-driving chips that can support fully autonomous vehicles, increasing the demand for advanced semiconductors. 

Limitations:

Regulatory Challenges: Stringent regulations and safety standards pose significant challenges to the widespread adoption of autonomous vehicles, affecting the growth rate of the market.

High development costs: High costs associated with research, development and manufacturing of self-driving chips may limit the market growth, especially for smaller players and startups.

Security Issues: The vulnerability of self-driving vehicles to cyber threats and hacking is a major limitation, leading to data protection and vehicle security issues.

Opportunities:

Emerging Markets: Rapid urbanization and rising disposable incomes in emerging markets offer lucrative opportunities for market expansion, especially in regions such as Asia Pacific and Latin America.

Partnerships and collaborations: Strategic partnerships and collaborations between automakers, technology companies and semiconductor suppliers can drive innovation and accelerate market growth.

Integration of artificial intelligence and IoT: The integration of artificial intelligence (AI) and Internet of Things (IoT) technologies in self-driving chips opens up new opportunities to improve vehicle intelligence, creating opportunities for market players to offer innovative solutions.

Challenges:

Complexity of system integration: Integrating self-driving chips into existing vehicles and systems can be difficult due to compatibility issues, requiring significant investment in research and development. 

Security considerations. Ensuring the safety and reliability of self-driving chips in real-world driving conditions remains a critical challenge that requires rigorous testing and validation processes.

Consumer acceptance: Building consumer confidence and acceptance of autonomous vehicles with self-driving chips is critical, requiring effective education and awareness campaigns about the technology's benefits and capabilities.

Automotive Self-Driving Chip Market

Size, by Product, - (USD Billion)

The Market will Grow

At the CAGR of:

11.8%

The Forecast Market

Size for in USD:

$139 Billion

A Changing Market for Automotive Semiconductors:

While the COVID-19 pandemic has sent consumers into free fall — auto sales fell 47 percent in the United States and 80 percent in Europe in April 2020 — sectors in some countries are seeing a strong recovery. As demand shifts from smartphones to home appliances and new cars, orders for semiconductors have increased and factories are scrambling to ramp up production.

After recent economic growth in some countries, the automotive industry is once again an important source of income for semiconductors. Most of the growth in this area is due to the shift to ADAS, as these systems need to process data immediately in response to unexpected changes, such as sudden traffic stops. Such functions require multiple connections and high-performance chips in the vehicle. As a result, they have a centralized electrical and electronic (E/E) architecture, as well as more sensors and computer electronics content than conventional vehicles.

However, not all AVs are the same, and the number and type of semiconductors required will largely depend on their level of automation. One common AV rating system created by the Society of Automotive Engineers (SAE) divides AV into six categories ranging from 0 (no automation) to 5 (full automation with self-driving features) (Figure 1). Note that Tier 2 is divided into two parts: entry-level (vehicles with some autonomous functions, such as braking, but still forcing drivers to keep their hands on the wheel at all times) and advanced (vehicles with more extensive autonomous functions that allow drivers to take their time - hands off the steering wheel from time to time).

Navigating the changing landscape for automotive semiconductors

The analysis shows that most OEMs fit into one of four semiconductor models (Figure 2). In the first model, which is the most common today, OEMs work directly with tier one suppliers. In addition to specifying chip requirements, vendors contract with integrated device manufacturers (IDMs) to design or select the necessary chips. If the chips are produced in an IDM or foundry, the supplier adds them to the system. In the second model, which is a variation of the first model, the tier one supplier takes the lead in both post definition and chip design. Since IDM services are not required in the second model, the first-tier supplier would access the foundry directly for production.

Value Chain Analysis:

Research and Development: This phase involves the conceptualization and development of self-driving chip technologies, including semiconductor design, algorithm development, and testing.

Manufacturing: Once the designs are ready, the manufacturing process begins, which includes semiconductor fabrication, assembly, and packaging. This stage requires advanced production facilities and expertise.

Distribution and supply: After production, self-driving chips are distributed to original equipment manufacturers (OEMs), auto component suppliers and technology companies involved in the development of autonomous vehicles.

Integration: Chips are integrated into various parts of autonomous vehicles, such as vehicle computers, sensor systems and control units during vehicle assembly.

Deployment and Service: After integration, self-driving vehicles with self-driving chips are used for testing, commercial use, or research purposes. This phase also includes post-implementation services such as maintenance, updates and support.

By understanding the value chain, stakeholders can identify opportunities for optimization, collaboration and value addition at each stage of the process.

Supply Chain Analysis:

Raw material: The supply chain begins with the acquisition of raw materials such as silicon wafers, chemicals and other materials needed to produce semiconductors.

Component suppliers: Semiconductor manufacturers rely on a network of component suppliers to provide critical components such as sensors, memory modules and processors.

Manufacturing facilities: Semiconductor manufacturing facilities play a key role in the supply chain where raw materials are transformed into self-conducting chips through complex manufacturing processes.

Logistics and Distribution: After manufacturing, self-driving chips are distributed to various customers and partners through logistics networks that may include transportation, warehousing, and delivery services.

OEMs and integrators: Original equipment manufacturers (OEMs) and integrators integrate self-driving chips into autonomous vehicles during vehicle assembly, often sourcing the chips from multiple suppliers.

Aftermarket services: The supply chain also includes aftermarket services such as maintenance, repair and upgrades, which may include distribution of replacement chips and spare parts.

Automotive Self-Driving Chip Market TO (USD BN)

CAGR OF

11.8%

Automotive Self-Driving Chip Market

139 Billion%

Porter's Five Forces Analysis:

Threat of New Entrants: High barriers to entry, including the need for meaningful; capital investment, intellectual property barriers and regulatory requirements limit the threat of new entrants.

Bargaining Power of Suppliers: Semiconductor manufacturers and component suppliers have significant bargaining power due to the specialization of components and technologies, although industry consolidation may reduce this power to some extent.

Bargaining Power of Buyers: OEMs, technology companies, and automakers may have moderate to high bargaining power in purchasing decisions due to the availability of alternative suppliers and the importance of cost, quality, and technical capabilities.

Threat of Substitutes: Although there may be limited direct substitutes for self-driving chips in cars, alternative technologies and solutions for autonomous driving, such as Lidar systems, may pose a threat in certain applications or market segments.

Competitive Competition: The automotive autonomous chip market is characterized by intense competition between incumbents such as NVIDIA, Intel, Qualcomm and emerging challengers, driving innovation, price competition and strategic partnerships.

Recent Developments:

January 8, 2024: CES — NVIDIA:  today announced that Li Auto, a pioneer in extended-range electric vehicles (EVs), has selected the NVIDIA DRIVE Thor™ centralized car computer to power its next-generation fleets. Li Auto Selects DRIVE Thor for Next-Gen EVs; GWM, ZEEKR and Xiaomi Develop AI-Driven Cars Powered by NVIDIA DRIVE Oringin, Wave of EV Makers Choose NVIDIA DRIVE for Automated Driving

LAS VEGAS, Jan. 9, 2024 – Today at CES, Intel announced plans to drive the company’s AI everywhere strategy into the automotive market, including a deal to acquire Silicon Mobility, a fabless silicon and software company that specializes in SoCs for intelligent electric vehicle (EV) energy management.

Frequently Asked Questions:

What is the projected market size & growth rate of the Automotive Self-Driving Chip Market?

Automotive Self-Driving Chip Market has been growing at a good pace over the last few years and is expected to grow at a CAGR of 11.8 % over the forecasted period i.e. 2023-2032

What are the key driving factors for the growth of the Automotive Self-Driving Chip Market?

The rapid increase in the development and commercialization of fully automatic vehicles is the major factor responsible for the growth of the global automotive self-driving chip market

What are the top players operating in the Automotive Self-Driving Chip Market?

Tesla, Horizon, Mobileye, Black Sesame Technologies, Westwell Lab, MediaTek Inc, Renesas, BOSCH, Qualcomm, and Intel.

What segments are covered in the Automotive Self-Driving Chip Market?

The Global Automotive Self-Driving Chip Market is Segmented into Product, Application And Geography.