OE Automotive Semiconductors Set to Grow to USD 25.5 billion in 2012, but Will Europe Brake the Global Market?

Semicast forecasts global light vehicle production volumes to grow to 82.2 million in 2012, from 76.4 million in 2011. Almost two-thirds of this increase is forecast for Brazil, Russia, India and China, with China now the engine of growth for global light vehicle production. Semicast forecasts light vehicle production to grow moderately in North America in 2012 and also in Japan, as the supply chain is restored following the disruption caused by the March 2011 earthquake and tsunami. In comparison, Semicast sees a fall in European light vehicle production in 2012, as both the debt crisis and possibility of one or more countries exiting the Eurozone continue to cause uncertainty and act as a brake on business investment and consumer confidence.

History shows a direct correlation between global light vehicle production volumes and revenues for OE automotive semiconductors. Revenues fell by thirteen per cent in 2009, to USD 16.6 billion, as production dropped to 57.6 million. However this was somewhat of an anomaly, with semiconductor sales into the OE automotive sector having previously increased with remarkable consistency, recording a minor fall only in 2001, before declining in both 2008 and 2009 as economic growth came to a standstill following the collapse of Lehman Brothers and the corresponding freezing of the global financial markets. Colin Barnden, Principal Analyst at Semicast Research and study author commented “Semicast forecasts continued growth in the BRIC countries to drive global light vehicle production volumes to almost 90 million in 2013, and to 110 million units in 2018. Revenues for OE automotive semiconductors are forecast to rise accordingly, to USD 29 billion in 2013, and to USD 45 billion in 2018”.

Looking ahead to the future of the automotive industry, it is evident that the complex capabilities of new systems are made possible by the use of ever faster, more powerful and more complex semiconductors. Semicast estimates that the average semiconductor content per new light vehicle will grow from around USD 300 in 2011 to more than USD 400 in 2018, itself a CAGR of almost five per cent. It is apparent therefore that the ability of automakers to comply with ever more stringent safety and environmental legislation and to satisfy the increasing expectations of the driver and passengers is dependent on steadily increasing use of semiconductors. As a result, as global light vehicle production volumes continue to rise, so the OE automotive semiconductor market will continue on the road to dependable growth.