ALL,
Interesting article on chips for autos.
A service of Semiconductor Business News, CMP Media Inc.
Story updated 8:30 a.m. EDT/5:30 a.m. PDT, 10/21/98
Automotive chip growth accelerates
By Will Wade
SAN DIEGO--While computers are still the largest consumer of silicon, the automobile is quickly driving into pole position as one of the fastest growing semiconductor markets. And the industry is far from mature, meaning there is only room to grow, according to Jiri Marek, manager of the automotive sensor division for Robert Bosch GmbH, who spoke here at the annual Dataquest semiconductor conference this week.
"The automotive chip market has one of the highest growth rates in the semiconductor business," Marek said. Not only are electronics accounting for a greater percentage of the value of a new car, semiconductors are also becoming the largest part of the automotive electronics market. He estimated that the total market for electronics in automobiles was $8 billion in 1990, swelling to $26 billion in 2000 and the mushrooming to $150 billion in 2010. Of those figures, chips represented only one quarter of the 1990 figures, but that will increase to two-thirds of the total in 2010, or $100 billion.
Dataquest senior analyst for semiconductor applications Xavier Pucel agrees, pointing out that the total market for chips in cars is growing at 11% per year through at least 2002, while new car production is growing at just 2% to 3%. Worldwide, the average car contains $153 worth of silicon this year, increasing to $223 in 2002.
Despite the attractive growth rates, the market has significant barriers, especially the difficult environment of a car's engine. Marek noted that operating temperatures range from below freezing in the winter to well over 100 degrees during the summer, and that consumer tolerance for even a single failure is extremely low. "People are not happy when their $30,000 car is brought to a standstill because of a $3 piece of silicon," he said.
Not only are the traditional automotive destinations for chips growing -- including sensors for airbags and advanced brakes, along with engine control components and audio equipment -- the market will continue to grow with several emerging applications. Marek said that 35% of the market will come from emerging applications within a few years. One of the hottest applications today is the car navigation system, which uses global positioning system technology to pinpoint a vehicle's location and offers directions to any destination.
Pucel also emphasized the market potential of auto entertainment systems, that could incorporate music, video and perhaps even Internet capabilities. "There is a growth opportunity from emerging features," he said.
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