The global automotive semiconductor business

This chapter provides an exposition on the increasingly paramount role played by the microprocessor (the ‘brains’) in today’s automotive industry. Further, this evolving trend is expected to accelerate, catalysed by the advent of the driverless car and its increasingly connected high-tech systems, which require progressively powerful, mobile and energy-efficient chips. The demand for chips combining these features places tremendous pressure on automotive semiconductor makers to continuously develop and seek cutting-edge technologies, increasingly critical as arbiters of market dominance. Moreover, this chapter reveals that the leading players in this industry are the ones responsible for chip design rather than manufacturing, which has been outsourced. The rising importance of this industry has also attracted the attention of non-traditional players such as Intel and Nvidia, which are attempting to dominate the future of autonomous driving by controlling its ‘brains’. This chapter provides an exposition on the increasingly paramount role played by the microprocessor in automotive industry. This evolving trend is expected to accelerate, catalysed by the advent of the driverless car and its increasingly connected high-tech systems, which require progressively powerful, mobile and energy-efficient chips. A relentless series of mergers and acquisitions resulted in the formation of four leading industry titans, namely NXP, Infineon, Renesas and STMicroelectronics which together accounted for over 40 percent of the global automotive semiconductor market. The global automotive semiconductor industry comprises the oligopolists who produce highly sophisticated microprocessors and microcontrollers, their lower-tier competitors and the foundry chip makers, who themselves have garnered a significant market presence through consolidation triggered by the cascade effect. The chapter reveals that the leading players in automotive industry are the ones responsible for chip design rather than manufacturing, which has been outsourced.