Automotive Microcontroller Market Size, Share & COVID-19 Impact Analysis, By Type (8-bit, 16-bit, and 32-bit), By Application (Infotainment & Telematics, Chassis & Powertrain, Body Electronics, and Safety & Security), and Regional Forecasts, 2022-2029

The global automotive microcontroller market size was valued at USD 5.20 billion in 2021. The market is projected to grow from USD 5.28 billion in 2022 to USD 7.71 billion by 2029, exhibiting a CAGR of 5.6% during the forecast period. The global COVID-19 pandemic has been unprecedented and staggering, with automotive microcontroller experiencing lower-than-anticipated demand across all regions compared to pre-pandemic levels. Based on our analysis, the global market exhibited a decline of -7.4% in 2020 as compared to 2019.

A microcontroller used in automotive comes with the least compact design in embedded systems. It comprises processor, memory, and peripherals. The system works with the help of integrated chips to control automotive functions and operations. These are used in certain automotive applications such as Advanced Driver Assistance Systems (ADAS), infotainment systems, and many others. With the growing demand and production of automobiles, it used in automobiles witness significant growth in the forecast period.

The customer's inclination toward the demand for connected and automated technologies to be integrated into modern cars propels the automotive microcontroller market growth. Moreover, increasing adoption and government initiatives to adopt autonomous vehicles on public roads will drive the market in the near future. However, threats related to safety and security, consisting of cyber threats and functional failures in extreme conditions, restrain the market growth. The major players are focused on research and development of safety and security features with compatible with automotive chipsets, which fuels the market growth in the forecast period.

COVID-19 IMPACT

Shortage of Components along with Declining Sales Owing to COVID-19 Impact Impacted Market Growth

The microcontroller market experienced a serious impact, especially during the initial phase of COVID-19. Production and exports were halted due to the COVID-19 impact, and companies witnessed a shortfall and disruption in the manufacturing of semiconductor chips and devices due to labor shortage. Microcontrollers used as a crucial component in the electronic control units integrated in automotive systems were in short supply, forcing the automotive manufacturers to reduce the production of automobiles. This hit the economy for the automotive industry.

The COVID-19 pandemic has disturbed the supply chain with the shortage of raw materials, due to which the automotive industry witnessed a scarcity of numerous goods. The government-enforced lockdowns and economic crisis induced due to the COVID-19 pandemic have severely impacted the key players in the automotive components markets.

The companies also focused on research & development of various automotive semiconductor products that will help the automotive industry in an efficient manner post-COVID-19 pandemic. Major players in the market performed mergers, partnerships, and acquisitions to sustain themselves in the market.

For instance, STMicroelectronics designed a stellar automotive microcontroller unit in a new zonal architecture that will be used in software-defined vehicles.

LATEST TRENDS

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Increasing Use of Connected Technologies in Vehicles is a Latest Trend for the Automotive Industry

Connected technologies offered in a vehicle help the user and vehicle to interact with each other. With the help of connected technologies, a connected car can access the internet through the inbuilt systems. It offers smart features, including internet connectivity, remote operation of vehicle functions, and advanced safety features. The connectivity in the automotive industry has set the trend in modern car feature that is transforming the industry. Technologies such as Artificial Intelligence, Advanced Driver Assist Systems ADAS, park assist system, Vehicle to Infrastructure (V2I), Vehicle to Vehicle (V2V), Vehicle to Everything (V2X), and many other features are inclining the automotive industry toward autonomous driving functionality.

The devices integrated with this technology are all connected to the microcontroller to operate the functions efficiently. For this purpose, the advancement in the this semiconductor device is also necessary, as it plays a crucial role in the vehicle control system. Moreover, major companies focused on the concept of robotaxi are providing automated ride-hailing services with the help of connected technologies. This is creating a trend in the market that is fueling the market growth.

DRIVING FACTORS

Rapid Development in Automotive Industry along with Demand for Safety Features Drives the Market

The microcontroller used in the automotive industry is utilized in several systems such as fail-safe systems, electric control units, automotive fault-tolerant systems, and others. The fault-tolerant system senses any fault in the vehicle or any incident to be occurred by the vehicle with the help of a sensor microcontroller and engages the required function for that instance.

According to the Department of Transportation of the U.S., nearly 32 fatalities occur every day in the U.S. in drunk and driving car crashes, which is one fatality every 45 minutes.

As per the annual traffic crash data released by the Department of Transportation National Highway Traffic Safety Administration (U.S.), in 2020, nearly 38,824 lives were lost in traffic crashes across the U.S. Therefore, due to the increase in road accidents worldwide, the demand for safety features such as parking assistance, lane departure warnings, collision avoidance systems, electronic stability control, airbags, telematics, traction control, blind spot detection system, and adaptive cruise control is driving the market.

Rising Government Regulations on Emission Reduction Drives the Market

Microcontrollers are widely used in powertrain applications to minimize vehicle emissions and improve engine efficiency. Moreover, these aid in reducing fuel consumption. In April 2019, the European Union adopted regulation 2019/631 to reduce CO2 emissions from passenger and light commercial vehicles. This regulation specifies fleet-wise emission standards for the next decade. Specific standards for cars and vans are set under this regulation for 2020 – 2024.

If a manufacturer fails to maintain these targets, then a penalty will be levied for each of its vehicles newly registered in that year. Microcontrollers play a pivotal role in emission control technology and help minimize CO2 emissions by enabling efficient engine control. Such government initiatives and technological advancements will drive the market growth.

RESTRAINING FACTORS

Functioning and Operational Failures in Extreme Weather Conditions Hamper Market Growth

An automotive microcontroller unit that faces failure issues leads to a complete shutdown of the vehicle's operation. It has a very low tolerance to a temperature, such as in extreme cold and hot environments, which causes impairment in its functions and results in operations failures. In extremely hot temperatures, the microcontroller tends to melt down, breaking the resistance and weakening signals, due to which failure occurs. Moreover, it also stops working in extremely low temperatures.

Due to this issue, countries that experience extreme weather conditions tend to use the least number of semiconductor components required in the vehicle, majorly restraining the market. Although to tackle this situation, various companies are focused on developing advanced semiconductor devices, such as high-temperature and low-temperature microcontrollers, that will sustain the temperature variations according to the region.

STMicrocontroller introduced the SPC5 family of 32-bit automotive controllers designed to operate for various applications, including ADAS to engine and transmission control, safety features, and others. The SPC5 controller offers up to three cores and can operate at a temperature range of -400⁰C to 1,650⁰C temperature.

SEGMENTATION

By Type Analysis

Growing Application where Intense Data Processing is Needed and Increasing Advanced Features in Each Vehicle to Drive Segment Growth

Based on type, the market is divided into 8-bit, 16-bit, and 32-bit.

The 8-bit segment held a significant market share in 2021. 8-bit microcontrollers require less space and are cheap. Many under-hood automotive electronic systems need microcontrollers that can withstand high-temperature requirements. These controllers are used in various applications, including lighting, comfort & information, security body electronics and telematics, entry control, powertrain, and safety & chassis, thus driving the market.

The 16-bit segment held a certain market share in 2021. They provide excellent performance with significant power savings. 16-bit microcontrollers offer the perfect middle ground in terms of cost, size, and processing speed between 8-bit and 32-bit controllers that drives the market in the forecast period.

The 32-bit segment held the largest market share in 2021. These microcontrollers are ideal for applications where intense data processing is required. The demand for 32-bit microcontrollers is rapidly rising due to requirements for excellent performance, high accuracy, and superior power efficiency. These devices are widely used in gearboxes for injection control and combustion engines’ central control units, thereby fueling the market growth.

By Application Analysis

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Increasing Vehicle Software & Electronic Content to Drive the Segment Growth

Based on application, the market is split into infotainment & telematics, chassis & powertrain, body electronics, and safety & security.

Infotainment & telematics segment held a decent market share in 2021. The advent of technology and connectivity in the automotive industry will surge the demand for microcontrollers in this segment. Increasing telematics penetration in the automotive mainstream will drive the segment’s growth in the future.

Chassis & powertrain segment accounted for the largest market share in 2021. Rising demand for improving engine efficiency and control will drive the segment’s growth. Microcontrollers are widely used in Engine Control Unit (ECU) diagnostics applications. In addition, these devices aid in improving the power and fuel efficiency of the vehicle, propelling the market growth.

The body electronics segment accounted for a significant market share in 2021. Increasing vehicle software content will drive body electronics penetration, thereby supporting market growth. Body electronics are essential in a vehicle to create comfort and convenience. These microcontrollers help improve the operational capabilities of heating, Ventilation, and Air Conditioning (HVAC) systems, lighting systems, and door control systems that drive the market.

The safety & security segment accounted for a certain market share in 2021. The threat of cyber security in the wake of the rising penetration of connected and autonomous vehicles will surge product demand within this segment. Increasing penetration of connected and autonomous vehicles will drive the future demand for safety and security systems, that in turn, will drive the market growth.

REGIONAL INSIGHTS

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North America held a significant automotive microcontroller market share in 2021. Major players are focused on investing in the development of technology that will be integrated into the vehicles of the future. For instance, in July 2021, Texas Instruments launched a new high-performance microcontroller portfolio that advances real-time control, networking, and analytics applications, driving the market in the region.

The market in Europe accounted for a decent market share in 2021. Many European countries are focused on deploying rules and legislation for adopting autonomous cars fueling the market growth. The European companies also focus on introducing new microcontrollers that drive the region's market growth.

The Asia Pacific region is the fastest-growing region and dominates the market, accounting for the largest market share in 2021. Major market players in the region are focused on developing and deploying body electronics with advanced technologies and solutions that require microcontroller integration. Renesas Electronics Corporation unveiled its new generation of microcontrollers using a 28nm process technology to be used in automotive. These MCUs are integrated with a built-in flash memory of 16MB and enhanced security and functional safety.

The rest of the world market accounted for a sustainable market share in 2021. Major players are focused on deploying connected and automated cars for ride-hailing services in the region to increase their reach. This creates a lucrative demand for microcontrollers to be used in automobiles in the region, driving the market growth.

KEY INDUSTRY PLAYERS

Focus on Development of Automotive Microcontrollers to Drive the Competition

The global market is consolidated with several automotive semiconductor chipset manufacturers operating in this industry. It is observed that key players have a wide product and service portfolio that includes various types and applications than other market players. Most of the players involved in the market are established market leaders with wide industry experience. The majority of the regional players are focused on their acquisitions & expansion through dealership and production activities. The players are focused on developing products with increasing investment in research and development that are compatible with the latest trends and technologies.

Renesas Electronics Corporation is One of the Prominent Companies in the Market 

Renesas Electronics Corporation is a leading automotive microcontroller company. It is involved in highly automotive solutions-oriented research and developments, providing updated technology microcontroller products. Renesas is also focused on expanding its product portfolio to acquire a strong foothold in the market, provided by increasing production capacity to achieve higher product delivery rates and customer satisfaction. For instance, in November 2021, Renesas Electronics Corporation announced the expansion of its 28nm Cross-Domain Automotive Control Microcontroller Line-up.

LIST OF KEY COMPANIES PROFILED:

• Infineon Technologies AG (Germany)


• Texas Instruments (U.S.)


• NXP Semiconductors (Netherlands)


• STMicroelectronics (Switzerland)


• Microchip Technology Inc. (U.S.)


• Renesas Electronics Corporation (Japan)


• Analog Devices Inc. (U.S.)


• Silicon Laboratories (U.S.)


• Toshiba International Corporation (Japan)


• GigaDevice (China)

KEY INDUSTRY DEVELOPMENTS:

In April 2022, Toshiba International Corporation launched its new M3H Group of ARM Cortex-M3 Microcontrollers under the TXZ+TM Family Advanced Class. These microcontrollers are equipped with various applications, including motors, home appliances, and industrial equipment. It also offered various interface and motor control options such as an encoder and programmable motor driver.

In November 2021, Renesas Electronics Corporation announced the expansion of its 28nm Cross-Domain Automotive Control Microcontroller Line-up. The company also introduced a new group of powerful microcontrollers, the RH850/U2B MCUs, designed for the integration of multiple applications in a single chip for the evolving Electrical-Electronic(E/E) Architecture. The MCUs are built for hybrid ICE and xEV traction inverter, high-end zone control, connected gateway, and domain control applications.

In September 2022, Microchip Technology announced a 32-bit MCU based on Arm Cortex-M0+ Core with features such as Functional Safety, Cyber-security Protection, and AUTOSAR Compatibility Features. This 32-bit chip from Microchip Technology addresses the solution for functional safety and cyber-security protection. The PIC32CM JH MCU also includes a refined touch with a driver shield that provides noise and water-tolerant operability.

In September 2022, STMicroelectronics launched its Stellar P6 Automotive MCU with the EV platform system integration application. It supports new high-data-rate in-car communication protocol and is also capable of over-the-air updates for systems. The introduction of this MCU series will boost the transition toward software-defined vehicles. The MCU is capable of fully synchronized operations and over-the-air upgrades for both maintenance and continued performance improvement.

In April 2022, STMicroelectronics unveiled its new microcontrollers used in automotive that are optimized for centralized (domain and zonal) electronic architectures. The new Stellar E series can sense the environment, control vehicle dynamics, enhance power-conversion efficiency, and safely manage high-current power stages that are effectively handled in a single component. Introducing these new MCUs enables EVs to be more affordable and sustainable.

REPORT COVERAGE

An Infographic Representation of Automotive Microcontrollers Market

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The research report provides a detailed analysis of the market and focuses on key aspects such as leading companies, types, and applications in the automotive industry. Besides this, the report offers insights into the market trends and highlights key industry developments. In addition, the report encompasses several factors that have contributed to the growth of the market in recent years.

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