Undeniably, the current economic crisis has hit the automotive industry hard. And although the market is in dire straits, the mandated restructuring that has begun to occur will, in the long run, benefit a growing market for automotive technology. Inefficiency that for a long time has been building in this industry appears to have reached a level of urgency, where the environment adapts more quickly to change versus the status quo. Crisis drives fear and fear drives change.

The outlook for automotive electronics near term is not good and it's even worse for technology suppliers supporting this segment, but as all crisis events are unpleasant, once the storm moves through, opportunity begins to reseed itself. Worldwide automotive semiconductor sales reached just over $20 billion in 2008 and, this year, Databeans is expecting a contraction of 25% with recovery back to the $20 billion level predicted to occur in 2012.

Worldwide Automotive Semiconductor Revenue Forecast

This recovery will be driven by the increasing electronic content in vehicles and the continuing support for R&D, a lifeline to the automotive semiconductor industry, while production is on life support. Databeans estimates that the percentage of electronic content in vehicles reached 13%, meaning that for a vehicle costing say US $12,700 to produce, $1,646 worth of electronics are inside. In 2009, that percentage is expected to be 13.5% and 14.8% by 2012. Beneficiaries of this rise will be suppliers of microcontrollers, analog, and sensors primarily, many of which are already at the top of the leader board in automotive semiconductor revenue share.

Players include Freescale Semiconductor, Infineon Technologies, STMicroelectronics, Renesas Technology and Bosch. Freescale continues to remain the market share leader in automotive semiconductor products with 9.5% share of the $20 billion automotive semiconductor market followed by large analog and sensor players, Infineon and ST.

2008 Worldwide Automotive Semiconductor Revenue Share by Supplier

For more information on the automotive market and specifically on the semiconductor opportunity in automotive, Databeans offers a complete study as well as individual microcosm market studies focused on safety systems, body electronics, drivetrain, infotainment and aftermarket. To read more, please visit our web site at www.databeans.net. Databeans proactively provides clients with market studies as well as full advisory and reference support on the automotive market as well as computers, consumer, wireless, wireline and industrial technologies.