El Segundo, Calif. — Semiconductor consumption in 2014 by China's automotive industry will reach $4.6 billion, up 11 percent from $4.1 billion last year, driven by increased demand for vehicle safety features and infotainment applications, including car navigation, according to a new report from IHS Technology (NYSE: IHS). This follows a 10 percent increase in the China automotive chip market in 2013.
Semiconductor revenue in China's automotive industry is expected to reach $6.2 billion by 2017. One of the fastest-growing chip segments is processors for advanced driver assistance systems (ADAS) and vehicle-related safety features, which IHS forecasts to reach $45.0 million by 2017, up from $8.8 million in 2013.
“The replacement of midrange and high-end cars this year will drive the China chip market for automobiles,” said Alex Liu, analyst for China research at IHS, in a statement. “In particular, demand will be great in vehicle safety and control applications like advanced driver assistance systems (ADAS), as well as in manufacturer-included or aftermarket infotainment navigation equipment.”
Automobile production and shipments are expected to continue on an upward swing, driving demand for automotive semiconductors, particularly new microcontrollers and sensors for vehicle safety and comfort, according to IHS. Shipments of passenger cars, alone, grew two percent in 2013, reaching 15.8 million units, according to the IHS report, Automotive Electronics Report – China – H2 2013.
Another revenue driver is ADAS systems, which are becoming increasingly popular in China, according to the report. These systems, including adaptive cruise control, parking assist, forward-collision warning, lane-departure warning and blind-spot detection, are fueling growth for sensors that are used in applications such as cameras, radar systems, ultrasound and LIDAR.
The report also finds that one of the biggest areas of competition between OEMs and the aftermarket is navigation. Aftermarket shipments in China for car navigation systems in 2013 reached 7.1 million units, up 20 percent from 2012. Key navigation processor suppliers included CSR, MediaTek, MStar Semiconductor, Samsung, and Freescale Semiconductor.
In comparison, OEM navigation shipments totaled 2.4 million units, up 15 percent. However, IHS expects OEM-related navigation to grow significantly over the next several years as prices start to decline for branded systems, while the aftermarket starts to slow. Renesas Electronics was the leading processor supplier for OEM navigation with more than 40 percent shipment share, followed by Freescale, Texas Instruments, CSR, and Bosch.