In 2014, the automotive sector significantly outperformed the overall market average for semiconductors. In fact, the automotive market overtook data processing to become the third largest end market for power semiconductor applications, according to IHS Inc. Based on information from the IHS Power Management Market Share and Supplier Analysis report, demand for semiconductors by the automotive industry was particularly strong in advanced driver assistance systems (ADAS) and infotainment systems. In the power management semiconductor market, power integrated circuits (ICs) grew much faster than traditional power discrete solutions. The automotive power IC category in 2015 is forecast to grow 8 percent, year over year, while discrete revenue is projected to remain flat during the same time period.
"One strategy that automakers are undertaking to control research and development costs is to develop shared designs, components, engineering, and production platforms, and using the same electronic control units (ECUs) for many different platforms with the same features," said Jonathan Liao, senior analyst of power semiconductors for IHS. "While over time modern cars have increased in size, suppliers prefer small and interchangeable electronic control units that can fit on various platforms, which help lower overall development costs, and expand the universe of target customers, for an improved return on investment."
As a result of this approach, automotive power ICs are growing faster than discrete solutions. For example, Texas Instruments, the market leader in voltage regulators -- controlled 8 percent of voltage regulators used by the automotive industry in 2011 and increased its voltage regulator revenues by 150 percent by the end of 2014. By comparison, Infineon -- the leading automotive-market supplier of discrete power solutions -- increased their power management revenues, at roughly half of Texas Instruments' growth rate, during the same time period.
Increased consumer demand has caused many luxury car features to find their way into the non-luxury car market, which is causing an increase in overall demand for power ICs. Adaptive cruise control, blind-spot monitoring, connected traffic updates, sophisticated infotainment systems with voice command and other advanced features are being integrated, as both options and upgrades, into mass-produced mid-range vehicles, like the Ford Fusion, which has a suggested price of $22,000. "Features that were originally designed for Mercedes-Benz, BMW, Lexus and other luxury cars have very quickly found their way into the non-luxury market," Liao said.
There are several key features that will encourage further power IC adoption, including Internet-connected cars, vehicle-to-vehicle (V2V) communications, autonomous cars, Apple's CarPlay and Android Auto. For all of these features, application processing speed and software are critical components.
"It is crucial for the ECUs to gather, process and respond to information in real time, for the safety and convenience of the driver," Liao said. "Sophisticated power management solutions for power-intensive multi-core processors, baseband chipsets and sensor arrays can be implemented much more easily with power ICs." All of these advanced features are expected help power ICs to grow faster than discrete solutions.
The overall trend of power ICs outperforming power discrete solutions in the automotive semiconductor sector is expected to continue. Switch regulators, low-dropout (LDO) regulators and power management integrated circuits (PMICs) are examples of fast-growing power IC components with better integration, efficiency and smaller footprints --especially for low voltage applications in automotive electronics.
For information about purchasing the IHS Power Management Market Shares & Suppliers Analysis report, contact the sales department at IHS in the Americas at (844) 301-7334 or [email protected].