PALO ALTO, CA – Revenues of ICs used in the world’s automobile market will grow 34% by 2010 from $6.8 billion last year, Frost & Sullivan said today.
The proliferation of automobile electronic content is a result of government pollution guidelines, safety and security regulations, and the ongoing oil crisis, says the research firm. This growing need directly influences the markets of automobile application specific integrated circuits, application specific standard parts, and field programmable gate arrays.
In addition, rising fuel prices in the world market feed the demand for electric and hybrid vehicles, which in turn can boost the growth of electronics in automobiles, the company adds.
Sales of ASICs, ASSPs, and FPGAs have improved because of integrated solutions, which have enabled manufacturers to lower costs by reducing the number of microcontrollers in automobiles.
Mandatory government regulations to enforce safety and security have greatly contributed to the growth of this market, Frost says. In Europe, regulations such as the electronic stability program, antilock braking system, and electronically controlled independent suspension will likely help generate substantial revenues.
In the Asian region, increasing sales of automobiles drives the growth of ASICs, ASSPs, and FPGAs markets, and the Asian market also has the potential to become the key contributor to overall revenues, the firm believes.
Intense competition in the market exists, however, especially among the ASIC and ASSP segments. These products are characterized by higher nonrecurring engineering and take a longer time to market.
Technological developments can help reduce the time to market and NRE cost in ASIC and ASSP. Similarly, developments in FPGAs can lower the unit and integration costs and improve performance, says Frost.
Chipmakers can further resist competition by creating an extensive portfolio of core designs, developing electronic design automation software tools, and engaging with OEM customers in accelerating the market share of programmable logic devices.