The market share of automotive IC is expected to rise to 10% by 2026

According to the latest report from IC Insights, a market research organization, the market share of automotive IC (Figure 1) has steadily increased since 1998, from 4.7% of the total IC sales in that year to 7.4% in 2021. However, at present, the communication and computer fields are still the largest application markets for IC total sales.

The agency predicts that the market share in the automotive sector will continue to grow, reaching 8.5% this year and 9.9% by 2026. At the heart of this growth is the integration of a large number of new sensors, analog devices, controllers, and optoelectronic devices into most new vehicles. Generally speaking, a traditional vehicle typically requires 500-600 chips, while a new energy vehicle requires more chips, reaching more than 1000. In addition, the growth in global sales of hybrid and all electric vehicles is driving this forecast growth.

According to a report released by Automotive News, the rapid growth in electric vehicle sales in the first three months of 2022 has brought the share of electric vehicles in new vehicle sales in the United States to about 5%. Of the approximately 250 million cars and light trucks in the United States, it is estimated that only 1% are electric, but sales continue to grow.

These factors are expected to result in the highest CAGR of 13.4% for the automotive market in any major end use area from 2021-2026 (Figure 2). However, given its relatively small size, high growth in the automotive IC sector is not expected to significantly increase the growth rate of the entire IC industry in the next five years.