Thursday, June 13, 2024

Automotive Electronics Industry Growth Prospects And Strategies

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From electric vehicles (EVs) to autonomous vehicles, discover the challenges, key players, and market segments driving a $136 billion industry revolutionising vehicles and the transportation landscape.

In the fast-paced world of automotive electronics, where innovation is the name of the game, businesses need to stay ahead of the curve to remain competitive. This exploration delves into the intricate world of automotive electronics, shedding light on key trends, challenges, and opportunities shaping the industry. The focus here centres on two critical components: sensors and power electronics, both of which play a pivotal role in the development of modern vehicles.

Fig. 1: Percentage of key strategies adopted
Fig. 2: Global conventional sensor market scenario—present and projected

Prominent trends and drivers of growth

The automotive electronics industry has undergone a remarkable transformation in recent years. It has witnessed a surge in demand for electric vehicles (EVs), with regions like India and Northern Europe catching up with the trend. This shift towards EVs brings with it a unique set of challenges, particularly concerning battery management. To ensure the efficient operation and safety of EVs, many sensors are required to monitor factors such as battery charge, health, and temperature.

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The industry is experiencing a growing demand for connected and software-defined vehicles. Features like vehicle-to-everything (V2X) communication, vehicle-to-grid (V2G), and vehicle-to-infrastructure (V2I) are becoming increasingly essential. These developments have led to a surge in demand for various electronic components to support these advanced features.

Increasing usage of electronics

The adoption of EVs and the integration of advanced features in modern vehicles have led to a substantial increase in the usage of electronic components in each automobile.

Growing number of connected vehicles

As vehicles become more connected, the demand for sensors and electronic systems to support connectivity features continues
to rise.

Focus on safety and automotive regulations

Governments worldwide are imposing stricter regulations to ensure the safety of vehicles, especially in areas like battery safety in EVs. This has led to a push for innovation within automotive electronics.

Autonomous vehicles

The development of autonomous vehicles introduces a whole new array of sensors and electronics, including lidars, advanced image sensors, radars, and ultrasonics. The level of autonomy directly impacts the number and complexity of sensors required.

Demand for connectivity and infotainment features

Consumers increasingly seek connected and infotainment features in their vehicles, further driving the demand for automotive electronics.

The future of automotive technology hinges on the perfect synergy between software precision and essential hardware components. While software excellence is crucial, sensors like lidar, advanced image sensors, radar, and ultrasonics play a vital supporting role.

As vehicles advance from autonomy levels one to five, the demand for sensors skyrockets. This surge is a significant growth driver, aligning with the increasing demand for connectivity and advanced infotainment in the automotive sector.

Influence of patents on sensor technologies and automotive electronics
Global industry leaders are heavily investing in research and development, particularly in sensor technologies and automotive electronics. The following chart shows the number of patents published.

Total patents published by leading automotive electronics companies: 1,300+ (2018 onwards)

• Patents play a crucial role in sensor technologies and automotive electronics, accounting for 34.9% of vital patents in the industry.
• Focus areas for innovation include sensors that drive advancements in autonomous vehicles, with a range of cutting-edge technologies like image sensors, radar systems, lidar, and various automotive processes.
• A significant portion (approximately 60% to 65%) of these patents have been filed in China since 2018, indicating a substantial shift in the industry’s innovation landscape toward this region.
These statistics highlight the key technological domains and innovation areas where leading companies concentrate their research and development efforts.

Challenges in the automotive electronics industry

While opportunities abound, the automotive electronics industry also faces significant challenges that must be addressed. In the realm of automotive electronics, several challenges have come to the forefront.

First and foremost, the heightened connectivity of vehicles has given rise to mounting concerns regarding cybersecurity. The industry is grappling with the rising incidence of software threats, attacks, and recalls stemming from security vulnerabilities, posing a significant hurdle to progress. Furthermore, the intricacies surrounding the design and manufacture of scalable automotive electronics have proven formidable.

Establishing a resilient supply chain has become imperative to ensure uninterrupted production, which demands meticulous attention. Moreover, the escalating costs associated with raw materials, logistics, and the establishment of manufacturing hubs have cast a shadow on the cost-effectiveness of electronic components, warranting careful consideration within the industry.

Challenges that surfaced towards the latter part of 2021 and extended into 2022 underscored the necessity for a resilient supply chain and a robust manufacturing value chain. These vital components ensure the uninterrupted production of sensors and electronic systems.

Prominent industry players and their strategic approaches

Within the automotive electronics landscape, many vital players dot the industry’s diverse landscape. It is worth noting that this market exhibits a notable degree of segmentation. These players have been not just passive observers but active participants in engagements.

When considering some enlightening statistics, a comprehensive assessment of the critical developments reveals a strategic landscape characterised by nuanced approaches. As depicted in the pie chart in Fig. 1, over the past three years, 34.98% of the nearly 600 key strategies meticulously tracked have been centred around product development or the launch of new offerings.

Following closely behind are partnerships, collaborations, and joint ventures, highlighting the industry’s penchant for cooperative ventures. Additionally, market development and mergers and acquisitions feature prominently in the playbook of significant players, underlining their commitment to expanding their market share in preparation for the future. Notable strategies employed by these players include:


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