Automotive chips: Market highlights
10/01/2000
 |
null
Automotive applications, as an end-user market, was the fastest growing semiconductor segment in 1998, although only 5.5% of the total semiconductor market, according to a recently published market report. While other sectors languished during the industry downturn, automotive semiconductors grew at an 8% rate, fueled by the continuing migration of sophisticated electronic systems from luxury models to standard vehicles.
Surprisingly, vehicle production expansion is of little significance in the growth of semiconductor usage in cars. The study forecasts that vehicle production will expand at just under a 1% compound annual growth rate (CAGR) from 1996 through 2005 (Fig. 1). But semiconductor content in automobiles is increasing rapidly, and many new product designs will be required to keep pace with changing system requirements.
 Figure 1. World vehicle production. |
Market data
Electronics account for about 20% of the cost of today's new cars. The global demand for vehicle electronics systems is expected to climb from $46 billion in 1998 to $53.5 billion by the year 2000, and nearly $75 billion in 2005. Semiconductor content of these electronic systems will grow from $7.9 billion in 1998 to nearly $18.9 billion in 2005. Illustrating the strength of the automotive market sector for semiconductors, the segment grew 9.5% in 1998, while the overall semiconductor market shrank 8.9%. Semiconductors in multimedia, safety and security, and body electronics applications will grow at an 11-12% rate from 1998 through 2005, while engine and drive train electronics growth rates will be in the range of 5% annually. By 2005, semiconductors in body electronics (40% market share) will surpass semiconductors in engine and drive train electronics (35% market share). Figure 2 shows the relative percentage use of semiconductors in the four automotive application sectors.
Total semiconductor content/vehicle will grow at an 8.8% CAGR from 1998 through 2005, increasing from $175 in 1998 to $296 in 2005 (see Figs. 3, 4). The semiconductor share of total vehicle electronics systems will grow from 18% in 1998 to more than 22% in 2005. During that same period, the IC, discrete, and display market shares in automotive systems will shrink 12%, 14%, and 28%, respectively, while the market share for sensors nearly doubles. The CAGRs for the
component categories of ICs, discretes, displays, and sensors will be 6.8%, 6.5%, 3.6%, and 20.1%, respectively.
Market forces and trends
A number of forces are driving the increased integration of electronics into vehicles, including government and consumer demands for safety improvements and the reduction of environmental pollution.
The use of computers to design automobiles and simulate operational systems, as well as luxury extras like digital dash, vehicle navigation systems, antilock braking systems, and side-impact air bags, all desirable features of up-scale car models, also depend on electronic controls.
 Figure 2. Semiconductor market by major automotive application (market values in billions of dollars). |
Today, automotive electronics is a fragmented market with most of the semiconductor implementation in modular systems established by the automobile manufacturers. In order to improve the cost-effectiveness of these electronic systems, however, standards are gradually being adopted so that ICs can be more universally adaptable and less expensive. The advent of multiplexing systems, for example, will allow subsystems to be interconnected. The recent development of "smart sensors" (sensors containing solid-state electronic circuitry that can communicate directly with controlling ICs) is further aiding the proliferation of electronic systems in vehicles.
Market challenges and solutions
Automotive development time. Historically, there has been a large difference in the development time between automotive and conventional consumer products. The result is that automobiles have not included the latest technology; in fact, their technology is often several years old.
 Figure 3. Semiconductor content/vehicle. |
A partial solution for the disparity between production automobile technology and consumer product technology is waiting in the wings. An automotive electronic data bus has been defined to facilitate the interchange of information among automobile systems and provide for easy installation of new electronics. Called the intelligent transportation system (ITS) data bus or IDB, it is a serial communication protocol developed to permit "plug-and-play" installation of consumer-type products to a common network in a vehicle without requiring that the consumer-product manufacturer develop unique interfaces for each auto manufacturer's proprietary network. Further, the plug-in product will not have to complete automotive-type qualifications since its installation and use must not put critical automotive operations or safety systems at risk.
Since bringing a new auto design into production has traditionally been expensive, auto manufacturers had to be certain that there would be a market for particular features before they were designed-in or put into production. The IDB will allow manufacturers to sell accessory items designed with more recent technology.
It appears that the IDB will be adopted by most automobile manufacturers, although different software architectures may develop in Europe and Asia than in North America. The IDB will facilitate a more rapid adoption of technology into the automobile environment, increase competition in add-on systems, increase electronics usage, and reduce automotive electronic system costs.
Intelligent transportation systems. ITS systems are being developed worldwide to improve vehicle travel safety and reduce transit time. Governments are installing traffic management systems to move traffic faster and more safely and inform drivers of current and expected conditions. These systems include components that communicate with vehicles, electronic systems to receive and interpret traffic information and broadcast vehicle information to traffic control systems. ITS represents a convergence of the latest technologies and research results, and is poised to be one of the leading industries of the 21st century.
Many of the in-vehicle systems that will interface with ITS traffic management and information systems are expected to be added in using the IDB or similar vehicle bus system. In fact, ITS vehicle systems were the motivation for developing the ITS data bus.
A universally accepted approach to integration of automobile electronics in all world regions does not appear very likely. Europe, North America, Japan, and other world regions have differences in vehicle use and design that affect the electronic requirements. In the US, the big three auto manufacturers may well be able to economically compete with different approaches to overall electronics integration. In Europe, independent electronic suppliers support several different automotive customers in several different countries with a wide range of requirements. Given this situation, Europe may gravitate toward the backplane approach to electronic integration; however, there are serious efforts to establish a common vehicle bus technology with plug-and-play capability.
Power limitations and voltage trends. The surge in electronics and electrically actuated mechanisms is creating a power crunch in automobiles. Vehicles with many power-driven options are compromised by voltage sags, voltage spikes, heavy motors, and bulky wiring harnesses. New components that include electric brakes, flywheel starter/alternators, and electronically actuated valves that can increase engine efficiency and reduce fuel costs and emissions cannot currently be implemented due to lack of available power. In 2002 or 2003, the industry will begin to implement a higher voltage standard to improve efficiency and allow further implementation of electric options.
The issue of a new voltage standard is a hot topic of discussion worldwide in the automobile industry. It appears the new standard will be 36/42V. This translates to increasing battery voltage from 12V to 36V and alternator output from today's 14V to 42V.
A new 36V-only standard won't be all that easy to implement. Some electrical components such as lights will have a problem. Filaments in bulbs need the same wattage to produce the correct intensity. If the voltage is increased then to obtain the same wattage, the current would be reduced, but it is current that heats the bulb filament and to use a lesser current means the filament wire diameter must be proportionally smaller. The tungsten filament is already very thin and reducing it means it will be much more subject to damage due to shock and vibration.
 Figure 4. Semiconductor content/vehicle growth. |
The higher voltage will have no direct benefit for semiconductors but revising the electrical system could make a dramatic difference in device design. Currently, semiconductors for automotive applications must guard against conditions such as reverse polarity, which results from improper connections when jump-starting the car. Additionally, uncontrolled voltage spikes from the alternator require existing semiconductors to handle up to 60V. A new dual-voltage (12/36) system could allow semiconductors to operate off the 12V system where voltage spikes could be limited to around 20V. This would permit less expensive semiconductors to be used and further enhance the utilization of multiplexing systems.
Motors and actuators will experience the greatest cost reduction benefit from the increased voltage. A 50% size and weight reduction is possible for solenoids and actuators. Motors themselves can be made smaller but the gears will still have to power the same load and so the overall result may be a 20-25% size/weight reduction, which is still quite significant.
Additionally, smaller motors and actuators will permit thinner doors, thus removing weight and further improving overall vehicle operating efficiency.
Worldwide market outlook. New car sales are the principal market for automobile electronics, and auto manufacturers are the primary sales targets for semiconductor suppliers and distributors.
North America imports many more vehicles than it exports, while the opposite is true for Japan and Western Europe. The total vehicle production CAGR for 1998 through 2005 shows modest growth at 0.95%. Rest-of-world (ROW) production will exhibit a CAGR of nearly 4%, while Japan's production will shrink by 1%.
The use of ICs in vehicles is most extensive in North America followed closely by Europe and Japan. The ROW segment is a considerably smaller user of ICs in automotive applications, but will increase significantly in IC utilization, as it becomes more concerned about emissions and fuel economy.
The adoption of sophisticated electronics for vehicle control systems is also paced by the development of sensors and actuators. The future growth of vehicle electronics is arguably more dependent upon the development of reliable, inexpensive, accurate, and smart sensors and actuators than on computers, displays, and other electronic technologies.
Navigation aids and intelligent highway systems are of worldwide interest, since they hold the promise of alleviating many problems that frustrate our society such as travel time, pollution, vehicle-related accidents, and injury and death.
While extensive incorporation of electronics in automobiles can bring many niceties to our lives, manufacturers have learned long ago that every improvement must have an economic benefit and not add significantly to vehicle cost if it is to sell to the consumer.
This article was summarized from the report Automotive Chips: 2000 by George S. Fry. The report is available from Forward Concepts, Electronics Market Research, 1575 W. University Dr. #111, Tempe, AZ 85281; ph 480/968-3759, fax 480/968-7145, e-mail info@fwdconcepts. com, www.forwardconcepts.com. Price: $1875.