Automotive supply chain: rising chip content drives strategic OEM investments
Semiconductors are becoming vitally important for OEMs to provide the electronic functions now standard in modern vehicles.
Original equipment manufacturers (OEMs) are increasing their investment in automotive semiconductors as they move deeper into the supply chain to gain competence and ensure they have the components they need for electrification and advanced driving systems. Yole Group’s analysts, Yu YANG and Pierrick BOULAY take a step back and offer you today a snapshot of the semiconductor industry, fully dedicated to the automotive segment.
According to the latest automotive report, Semiconductor Trends in Automotive, the market research and strategy consulting company expects the market to exhibit strong growth to the end of this decade, rising at a CAGR of 11% from $52 billion in 2023 to $97 billion in 2029. And OEMs are positioning themselves to tap into this opportunity.
OEM involvement in the automotive semiconductor segment is a recent development, as they were previously not present in the market directly. The Covid-19 pandemic accelerated the shift, as supply chain disruptions caused some automakers to cut production or produce vehicles without certain chips. They are now more focused on supply chain resilience and developing chips in-house to replace third-party products.
This shift is reflected in Yole Group’s analysis, and its CCC model – Car, Chip, Confine – designed to help OEMs to create their targeted automotive semiconductor strategies.
Together, these metrics indicate whether an OEM is involved at a system level or investing more deeply in semiconductor design or manufacturing. A look at the top 20 global OEMs and three Chinese EV startups reflects different regional trends.
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- Yole Group Communications Team - communications@yolegroup.com