By Warren Savage 05/01/2007 9:00 AM EST -- Electronics Supply & Manufacturing
Approximately 90 percent of new-car innovation happens in the electronics. Add in the fact that a car's electronics provide roughly 50 percent of its market value, and the dollars begin to multiply quickly when the automotive electronics market is examined from a global perspective.
A recent study by Electronics.ca Publications (Quebec, Canada) found that the worldwide automotive electronics market hit $74 billion in 2006. Despite slowing auto sales, the company predicts that figure will grow to $110 billion by 2011. While those statistics bode well for the automotive electronics industry, they don't reveal the challenges manufacturers and their suppliers face in this increasingly competitive market.
Consider that the automotive environment is especially harsh in terms of temperature, vibration, moisture and electromagnetic interference. Additionally, there are all the passengers and pedestrians whose lives depend on the many systems within a car. Manufacturers, therefore, must carefully balance the demand for more sophisticated, feature-loaded vehicles against their ability to appropriately address safety while handling the increasing system design complexity that inevitably arises.
Couple this with the array of new automotive standards and the continued consolidation and global competition that manufacturers face, and it's easy to understand why all the segments of the supply chain are under pressure to rapidly adapt. This holds especially true for semi-conductor companies.
The traditional OEM design practice of assembling electronic platforms on circuit boards built from off-the-shelf parts is fast becoming obsolete.
Instead, OEMs are pushing that assembly back to their semiconductor suppliers that integrate at the chip level using semiconductor intellectual property (e.g., complex functions such as networking, inter-chip interfaces, power management and on-chip debug in IP form). Using this IP, semiconductor companies can quickly and reliably form leading-edge parts for the lowest possible price and the highest possible reliability.
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