SAN FRANCISCO — The size of the automotive IC market is on pace to grow by 18.5 percent to reach $32.3 billion in 2018, according to market research firm IC Insights. This would set a new all-time high for the automotive IC market for the third consecutive year.

The size of the automotive IC market is expected to continue increasing at a compound annual growth rate of 12.5 percent between 2017 and 2021, reaching $43.6 billion in 2021, IC Insights said.

According to IC Insights, growth in the automotive chip market this year is being driven once again by automation in the form of systems monitoring and control, safety, ADAS, convenience and increasing development in autonomous driving. The firm noted both consumer demand and government mandates for electronic systems that improve the safety, comfort and convenience of features in cars are being added to new cars each year.

The continued rise of the average selling prices for memory chips is also boosting the automotive IC market, IC Insights said.   

Automotive IC Market sales in billions of dollars

Last year, the automotive chip market was worth $27.2 billion, the current record for the segment.

IC Insights noted that the automotive IC market has experienced extraordinary growth swings over the past few years. The market grew by 11.5 percent in 2014, then declined by 2.5 percent in 2015 before rebounding with growth of 10.6 percent in 2016, the firm said.  

The market decline in 2015 was primarily the result of falling average selling prices across key automotive IC product categories, including microcontrollers, analog ICs, DRAM, flash, and general- and special-purpose logic ICs, which offset steady unit growth for automotive ICs that year, according to IC Insights.

Automotive ICs are expected to account for about 7.5 percent of the total IC market this year, according to IC Insights. The firm forecasts that this percentage will rise to 9.3 percent in 2021.

Analog chips are expected to account for 45 percent of the 2018 automotive IC market, with microcontrollers capturing 23 percent share, according to IC Insights' forecast.

— Dylan McGrath is the editor-in-chief of EE Times.