China automotive semiconductor market drives up 11% in 2013, thanks to safety and navigation features

The fast-growing semiconductor market for China’s automotive industry is set for double-digit expansion in revenue this year, according to a new report from IHS Inc.


The fast-growing semiconductor market for China’s automotive industry is set for double-digit expansion in revenue this year, propelled by an increasing desire among Chinese car buyers for added vehicle safety features China automotive semiconductor revenue forecast in billions of U.S. dollars. Source: IHS Technologyand helpful infotainment applications like car navigation, according to a new report from IHS Inc.

Chip consumption in 2014 by the country’s automotive industry will amount to $4.6 billion, up a solid 11% from $4.1 billion last year. This year’s projected revenue growth improves on the already strong 10% rise of the China automotive chip market in 2013, and three more years of similar notable increases will take place. By 2017, revenue will reach $6.2 billion.

“The replacement of midrange and high-end cars this year will drive the China chip market for automobiles,” said Alex Liu, analyst for China research at IHS. “In particular, demand will be great in vehicle safety and control applications like advanced driver assistance systems (ADAS), as well as in manufacturer-included or aftermarket infotainment navigation equipment.”

China continues to be a place of rising automobile production and shipments. Passenger cars, for instance, which make up three-fourths of all cars in the country, saw shipments climb 2% last year to 15.8 million units. The steady outflow of cars means there is a continuous demand for automotive semiconductors, especially for new microcontrollers and sensors that help drive car safety and vehicle comfort—two areas of increasing concern to China’s car buyers.

These findings are contained in the report, “Automotive Electronics Report – China – H2 2013,” from the Automotive and Transportation service of IHS.

Navigation a hot contest between OEM and aftermarket

Vehicle navigation is a key application of automotive semiconductors used for infotainment. Here original equipment manufacturers (OEM) of navigation equipment compete ferociously with the aftermarket for consumer dollars. But unlike other automotive applications such as power train and safety, the aftermarket segment for navigation has a sizable presence in China, providing car buyers the option to update or change the navigation systems in their cars after purchase.

Aftermarket shipments in China for car navigation systems last year reached 7.1 million units, up 20% from a year earlier. Key navigation-processor suppliers included CSR of Wales, MediaTek and MStar Semiconductor of Taiwan, Samsung of South Korea and Freescale Semiconductor from Texas.

OEM navigation shipments, in comparison, trailed at 2.4 million units, up 15%. But while the aftermarket is projected to slow down, OEM-related navigation will enjoy rapid growth in the years ahead as prices decline in branded systems. Moreover, next-generation technology such as telematics and internal smart connections are forging close ties with OEMs, which could provide the branded market highly needed leverage over the aftermarket.

Japan’s Renesas Electronics was the leading processor provider for OEM navigation with more than 40% shipment share, followed by other important players like Freescale Semiconductor and Dallas-based Texas Instruments; CSR, also prominent in the aftermarket; and Bosch of Germany. 

Security matters

Not just for high-end or luxury vehicles, ADAS systems are becoming increasingly common in China. Features such as adaptive cruise control, parking assist, forward-collision warning, lane-departure warning and blind-spot detection are fueling a vigorous market for automotive sensors that control such functions. The sensors used here include cameras, radar systems, ultrasound and LIDAR.

Parking assist is particularly popular in the Chinese market, owing to the serious space and parking problems in China’s megacities. Lower system prices have helped push growth for this market, with the total installed base by 2017 anticipated to reach some 18 million units.

Total processor revenue in China for ADAS and vehicle-related safety features amounted to $8.8 million last year, forecast to climb to $45.0 million by 2017.

- Edited by Allen Mowers, CFE Media.

No comments
The Top Plant program honors outstanding manufacturing facilities in North America. View the 2013 Top Plant.
The Product of the Year program recognizes products newly released in the manufacturing industries.
The Engineering Leaders Under 40 program identifies and gives recognition to young engineers who...
A cool solution: Collaboration, chemistry leads to foundry coat product development; See the 2015 Product of the Year Finalists
Raising the standard: What's new with NFPA 70E; A global view of manufacturing; Maintenance data; Fit bearings properly
Sister act: Building on their father's legacy, a new generation moves Bales Metal Surface Solutions forward; Meet the 2015 Engineering Leaders Under 40
Cyber security cost-efficient for industrial control systems; Extracting full value from operational data; Managing cyber security risks
Drilling for Big Data: Managing the flow of information; Big data drilldown series: Challenge and opportunity; OT to IT: Creating a circle of improvement; Industry loses best workers, again
Pipeline vulnerabilities? Securing hydrocarbon transit; Predictive analytics hit the mainstream; Dirty pipelines decrease flow, production—pig your line; Ensuring pipeline physical and cyber security
Upgrading secondary control systems; Keeping enclosures conditioned; Diagnostics increase equipment uptime; Mechatronics simplifies machine design
Designing positive-energy buildings; Ensuring power quality; Complying with NFPA 110; Minimizing arc flash hazards
Building high availability into industrial computers; Of key metrics and myth busting; The truth about five common VFD myths

Annual Salary Survey

After almost a decade of uncertainty, the confidence of plant floor managers is soaring. Even with a number of challenges and while implementing new technologies, there is a renewed sense of optimism among plant managers about their business and their future.

The respondents to the 2014 Plant Engineering Salary Survey come from throughout the U.S. and serve a variety of industries, but they are uniform in their optimism about manufacturing. This year’s survey found 79% consider manufacturing a secure career. That’s up from 75% in 2013 and significantly higher than the 63% figure when Plant Engineering first started asking that question a decade ago.

Read more: 2014 Salary Survey: Confidence rises amid the challenges

Maintenance and reliability tips and best practices from the maintenance and reliability coaches at Allied Reliability Group.
The One Voice for Manufacturing blog reports on federal public policy issues impacting the manufacturing sector. One Voice is a joint effort by the National Tooling and Machining...
The Society for Maintenance and Reliability Professionals an organization devoted...
Join this ongoing discussion of machine guarding topics, including solutions assessments, regulatory compliance, gap analysis...
IMS Research, recently acquired by IHS Inc., is a leading independent supplier of market research and consultancy to the global electronics industry.
Maintenance is not optional in manufacturing. It’s a profit center, driving productivity and uptime while reducing overall repair costs.
The Lachance on CMMS blog is about current maintenance topics. Blogger Paul Lachance is president and chief technology officer for Smartware Group.