Report: Automotive IC market to reach 9.7 percent CAGR by 2024

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Cars on freeway in massive gridlock.

IC Insights recently published an update forecasting the composition of the integrated circuit market by 2024. Notably, the organization predicts the automotive segment will reach a compound annual growth rate (CAGR) of 9.7 percent, up from 8.7 percent in 2019.

The semiconductor industry research group also predicts long-term contractions in communications, computing, and industrial IC sales.

Automotive IC Segment Growth

Based on currently available data, IC Insights believes the automotive segment will increase its share of the overall market by 1 percent in the next five years. The organization’s outlook contrasts with a June report about the vehicle IC, module, and discrete market from Omdia. That analyst group estimates the segment will fall by 16 percent in 2020 because of the coronavirus pandemic.

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That said, IC Insights and Omdia agree the automotive components sector will experience a recovery after year’s end.

NXP Semiconductors CEO Kurt Sievers gave a recent interview that supports the notion of a long-term vehicle IC segment expansion. The executive explained China’s car market, the world’s largest, saw year-over-year growth in April and May. He also noted his firm views the automotive semiconductor as an “absolute growth area” because of the rising popularity of electrification, next-generation onboard radar, and advanced driver assistance systems.

Though the automotive subsection will represent less than 10 percent of the IC industry by 2024, its gains are impressive.

The Rest of the 2024 IC Market

IC Insights has a less rosy forecast for other, larger parts of the integrated circuit market.

The firm expects the computer segment to fall from 35.6 percent CAGR in 2019 to 34.8 percent by 2024. The group explained that the subsection’s share of the larger whole has fallen by 20 percent since 1998, and its decline will continue. The organization also highlighted the 2019 collapse of memory module sales as a contributing factor to its plummeting relevance.

The research group predicts a modest 0.8 percent contraction of the industrial segment and a 0.7 percent uptick for the consumer IC fraction.

When it comes to the communications subsection, IC Insights offers a mixed outlook. The analysis company believes the segment will decline by 0.1 percent in the next five years. However, the business intelligence concern also observes it will see growth because of an increase in end-user applications.

While the firm’s update does not go into detail, the mounting ubiquity of Internet of Things (IoT) and 5G technology will likely buoy communications integrated circuit sales.

Until the coronavirus pandemic is brought under control globally, long-term economic forecasting will lack precision. That said, the commercial and consumer appeal of emerging solutions like smart vehicles and next-generation mobile data transfer seems undeniable.

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