KPMG projects that the automotive semiconductor market ($42 billion in 2019) will sky rocket to as much as $200 billion by 2040. Note this projection only covers semiconductors inside the vehicle-the reality is the growth of automotive related applications (e.g. EV chargers, infrastructure, cloud) will make this opportunity even more significant for the semi-conductor industry.
Advanced Driver Assistance Systems (ADAS) infotainment and telematics and electric powertrains will experience the highest growth rates between now and 2040, in fact KPMG projects that chips used in ADAS, infotainment and telematics and electric powertrains could capture 80 percent of the market by 2040, up from just 45 percent in 2019.
Four megatrends-electrification, autonomy, connectivity and mobility as a service (MaaS)-are reshaping the automotive landscape and dramatically increasing the semiconductor content in vehicles. This shift has profound implications for both the automotive and semiconductor industries. As electric, autonomous, and connected vehicles become reality automakers are forced to reconsider the capabilities, skills and talent they need to succeed and in the process are collaborating more closely with their semiconductor and electronics suppliers. Semiconductors will effectively become the new automotive ICE, Internal Computing Engine says Scott Jones, KPMG Principal Global Semiconductor Practice.
The report notes that the automotive industry could follow pattern seen in other technology-driven and software-defined industries such as personal computers and smartphones were only a few well position players capture value.
Complex decisions await semiconductor industry leaders and automotive executives across the global automotive supply chain about how to invest where to play and how to attract the talent to win.
KMPG predicts that the mass market for EVs is still a decade or more in the future. However connected vehicles drive semiconductor demand because, communication data and infrastructure. KMPG analysis shows that 70% of the US population lives within 10 minutes of an Uber or Lyft pickup.