Anne-Franoise Pele, EE Times(11/26/2007 9:00 AM EST)Paris
-- The ability of microcontroller- and microprocessor-based systems to satisfy automobile customers' needs for comfort, safety, information and entertainment in the car is fueling an explosion of applications and of cooperation between automakers and chip companies.
The International Automotive Electronics Congress held here earlier this month was a forum for the growing synergies between semiconductor suppliers and car manufacturers. But the message from the event was that despite the short-term boom in demand for automotive-grade microcontrollers and processor-based systems-on-chip (SoCs), the longer-term winners are going to be those chip and EDA companies that help automakers use fewer microcontrollers by way of a system-level, whole-vehicle approach to design and elec- tronics integration.
According to research firm Databeans Inc. (Reno, Nev.), the market for automotive semiconductors amounted to $18 billion in 2006 and is expected to reach $29 billion by 2012, garnering an annual growth rate of 8 percent on average. Frost & Sullivan (Palo Alto, Calif.), meanwhile, expects the market for active safety systems to grow from about $13 billion to about $21.3 billion over the same period.
STMicroelectronics NV (Geneva)--the third-largest supplier to the auto market after Freescale Semiconductor Inc. (Austin, Texas) and Infineon Technologies AG (Munich, Germany)--illustrates this upward trend. ST's Automotive Product Group reported sales of $1.36 billion for 2006, compared with total automotive billing of less than $400 million in 1996. The chip maker's compound annual growth rate (CAGR) in this market is 14 percent, while the CAGR of the market itself is about 6 percent. Looking 10 years ahead, ST's spokesperson said it plans to maintain a CAGR of more than 10 percent.
The automotive segment therefore shows good revenue potential for chip makers, and car makers see chip companies as the route to improving fuel economy, CO2 emissions and safety.
Indeed, car makers are under continuous pressure to make such improvements.
Reinhard Schulte-Braucks, head of the automotive unit of the Enterprise and Industry Directorate-General of the European Commission, said car makers will have to help reduce CO2 emissions to reach the community target of 120 g/km by 2012 and enhance road safety through crash-avoidance technologies. The re- quirements are detailed in the CARS 21 (Competitive Automotive Regulatory System for the 21st Century) strategy being promoted by the European Commission.
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