Global Trends in Automotive Electronics
Trends in the global automotive electronics industry include the adoption and provision of more safety features to meet regulatory requirements, the quest to develop more effective and efficient system to meet future autonomous vehicle needs, the increased demand for automotive electronics products driven by adoption of electric and hybrid vehicles, and demand for advanced entertainment, information, and communication systems. Below, you will find more details.
The increasing demand for more safety features in cars that are reliant on automotive electronics is one of the key trends driving the global automotive electronics market. For instance, to achieve a five-star vehicle rating, the U.S. New Car Assessment Program (NCAP) has made emergency brake systems and lane departure warning systems mandatory. In the EU, the European Parliament announced that it is considering mandating safety features such as autonomous emergency braking (AEB), seatbelt reminders, intelligent speed assistance, low-speed collision avoidance system, and collision warning for all newly manufactured car.
Increasing government regulations will boost the automotive electronics market in the world as the adoption of "various advanced automotive cockpit electronics products such as anti-lock braking system, advanced driver assistance system, electronic stability control and others" become mandatory in different regions of the world. It is expected that by 2019, 15% of all new vehicles would have electronic advanced driver assistance systems (ADAS) compared to just 6% in 2017.
ELECTRIC AND HYBRID VEHICLES
The increased demand and shift towards hybrid and electric vehicles is another trend driving the global automotive electronics industry. As several governments are increasingly adopting legislation to combat environmental pollution and global warming, automotive manufacturers are producing more electric and hybrid vehicles. Hybrid and electronic vehicles are heavily dependent on automotive electronics. The move towards electronic vehicles has also resulted in increased collaboration between tech companies and automotive electronics companies. M&As and joint ventures are also on the rise. For instance, Panasonic recently partnered with Tesla to produce batteries for electric vehicles, while Intel and Mobileye have a joint partnership to produce self-driving cars. Also, Qualcomm acquired NXP for $47 billion to make it the world's leading automotive semiconductor manufacturer. It's expected that similar joint ventures and M&As will be more common in future as companies seek the best way to gain an edge in the fast-growing industry and comply with government regulations. The electronic content in electrical and hybrid vehicles is expected to be double in value compared to that of combustion engines.
HIGH-END ELECTRONICS FOR NAVIGATION, INFORMATION, AND ENTERTAINMENT
Consumer demand for advanced navigation, information and entertainment is expected to drive the growth of the global automotive electronics industry. Intelligent front lighting systems, map-enabled coordination system, map-supported adaptive front lighting, and usage data transmission are expected to become standard features in vehicles in the coming years and are all heavily reliant on automotive electronics. There is an increased digitization of the dashboard of vehicles as automotive giants attempt to meet the demand for enhanced driving experience and remain competitive. Enhanced video and audio systems with internet via Wifi and Bluetooth connection, in addition to customized driving and passenger experience, is fueling the growth of the automotive electronics market. The increasing tourist activity around the world is also fueling the need for advanced electronic cockpit products that can meet the need for increased information from travelers. However, the growth of the industry is expected to be hindered by the cost of advanced cockpit electronics, as well as the cost of maintenance of technologically advanced cockpit electronics products. The expected increase in disposable income globally and expected reduced cost of semiconductors and electronics in future will probably keep outweigh cost concerns.
As the world gradually keeps moving towards self-driving cars, the automotive electronics market is expected to be one of the biggest beneficiaries. Currently, the amount of electronics needed by some new car is already enormous and some cars are now seen as computers on wheels. For instance, "the 2016 model of the Ford F-150 truck requires 150 million lines of software code to function." However, fully autonomous vehicles will demand even more electronics and semiconductors. Intel, in alliance with BMW and Mobileye, expects to create a fleet of autonomous vehicles in 2021. Such vehicles would require the implementation of "integrated vision systems, in connection with dozens of sensors and radars, that will enable thorough diagnoses of surrounding areas." In order to coordinate all the functions in an autonomous or semi-autonomous vehicle, "communication systems (within the vehicle, between vehicles, and between vehicles and infrastructures) are critical and large computing systems will be necessary to treat large amount of data." Currently, the most advanced vehicles incorporate about 450 semiconductors but a fully autonomous vehicle is expected to integrate about 7,000. Technological advancement such as IoT and AR are already driving the creation of sensors that enhance performance and safety in vehicles and this trend is likely to increase as more autonomous cars are developed.
DEMAND FOR MORE EFFICIENT AUTOMOTIVE ELECTRONICS
Apart from the expected increased adoption of electronics and semiconductors due to autonomous vehicles, the automotive electronics and semiconductor industry are also under pressure to produce more reliable and sophisticated units. For instance, although the current failure rate in the automotive semiconductor industry is about "1ppm, already very low by any standard today," it would result in about 7 vehicles out every 1,000 being a safety risk, a situation that is unacceptable in the automobile industry. This has led to a movement to achieve zero defect target in the automotive semiconductor industry.
In addition, as the demand for more comfort, safety, entertainment, guidance, and communication technology is expected to bring in players relatively new to manufacturing in the automotive space, analysts believe that they may struggle in meeting with the more stringent regulatory and safety requirement in the automotive industry. Hence, there will be an increased need to develop more efficient and effective automotive electronics system to meet future demands in the automotive industry. Globally, automotive electronics companies are increasingly investing in R&D efforts to meet the expected demands and standards.
To wrap up, trends driving the automotive industry includes the increased prevalence of electronic and hybrid vehicles, the move towards autonomous vehicles and the increased electronics and semiconductor components that autonomous vehicles require, demand for enhanced safety and infotainment features, and the push to create effective and robust systems that will meet the stringent regulations and standards in the automobile industry.