The automotive industry is undergoing a massive shift toward electric vehicles (EVs), and this transformation is driving an unprecedented demand for semiconductors. These tiny chips power everything from battery management to advanced safety features, making them a critical component of modern vehicles. As EVs become more advanced, the semiconductor market is experiencing rapid growth, shaping the future of the industry.
1. The global automotive semiconductor market was valued at approximately $50 billion in 2023 and is expected to surpass $100 billion by 2030
The demand for semiconductors in vehicles is skyrocketing. As EV production ramps up worldwide, chipmakers are doubling down on automotive solutions. This rapid market expansion presents a significant opportunity for both automakers and semiconductor companies.
For businesses in the semiconductor industry, now is the time to invest in automotive-specific production lines. EV makers must secure long-term partnerships with chip suppliers to ensure a steady supply of essential components.
With market value expected to double, securing a foothold now will lead to substantial gains in the future.
2. Electric vehicles require 2-3 times more semiconductors than internal combustion engine (ICE) vehicles
Unlike traditional gas-powered cars, EVs rely heavily on electronic systems for propulsion, power management, and connectivity. This means a single EV may contain three times the number of chips compared to an ICE vehicle.
If you’re an automaker, this statistic underlines the need to work closely with semiconductor suppliers to avoid future shortages. For chip manufacturers, it’s a clear sign that focusing on automotive chips is a smart business move.
The companies that can meet this demand efficiently will dominate the market in the coming years.
3. The semiconductor content in an EV can range between $1,500 to $3,000 per vehicle, compared to $400 to $600 for traditional ICE vehicles
The increasing reliance on semiconductors is making EVs more expensive to produce. Battery management systems, advanced driver-assistance systems (ADAS), and power electronics all contribute to this higher chip content.
For automakers, this means balancing cost and performance is critical. While premium EVs can absorb these costs, mass-market vehicles need efficient semiconductor solutions to remain competitive. Chipmakers should focus on cost-effective designs without compromising quality.
4. Power semiconductors account for about 30-40% of total automotive semiconductor demand, driven by EV powertrain needs
Power semiconductors are the backbone of EVs, managing everything from charging to energy conversion. Without them, EVs wouldn’t be able to function efficiently.
Companies investing in silicon carbide (SiC) and gallium nitride (GaN) semiconductors are in a prime position to benefit. These materials offer higher efficiency and lower energy loss, making them essential for next-generation EVs.
Automakers should consider securing long-term contracts with suppliers specializing in these advanced semiconductors.
5. The compound annual growth rate (CAGR) of automotive semiconductor demand is projected to be around 9-12% from 2023 to 2030
A growth rate of up to 12% per year means the automotive semiconductor market will continue expanding at a rapid pace. This isn’t a temporary trend—it’s a fundamental shift in the industry.
Investors should take note of companies leading in automotive chip production. Automakers must also rethink their supply chain strategies, focusing on partnerships that guarantee a steady semiconductor supply.
6. The transition to 800V EV architectures is increasing the need for high-performance silicon carbide (SiC) and gallium nitride (GaN) semiconductors
Higher-voltage EVs allow for faster charging and greater efficiency. But they also require advanced semiconductors that can handle higher power levels without excessive heat loss.
For semiconductor companies, this is an opportunity to refine SiC and GaN technology and expand production. Automakers should start designing vehicles that support 800V architectures to stay competitive in the long run.
7. Silicon carbide (SiC) demand in automotive power electronics is expected to grow by 30% annually due to increased EV adoption
SiC chips are more efficient than traditional silicon-based chips, especially in high-power applications like EVs. They allow vehicles to charge faster and drive longer on a single charge.
This rapid growth means suppliers need to expand their production capabilities now. Automakers should secure contracts with SiC providers early to avoid supply chain disruptions.
8. EV inverters, a key semiconductor-intensive component, are projected to reach a market size of $15 billion by 2030
Inverters convert electricity from a vehicle’s battery into usable power for the motor. As EV adoption grows, so does the demand for these crucial components.
For chip manufacturers, investing in power semiconductor R&D will pay off as demand surges. Automakers should prioritize inverters with high efficiency to maximize vehicle range.
9. Automotive microcontroller unit (MCU) shipments for EVs are expected to grow at a CAGR of 8-10% over the next decade
MCUs control everything from infotainment systems to battery management in EVs. As vehicles become more connected and autonomous, demand for MCUs will keep rising.
Manufacturers should explore high-performance, low-power MCUs to optimize efficiency. Automakers should work with multiple suppliers to mitigate risks of future shortages.
10. Advanced driver-assistance systems (ADAS) and autonomous driving will drive over 50% of automotive semiconductor growth by 2030
ADAS features like adaptive cruise control and automatic emergency braking rely on powerful chips to process data in real time.
For semiconductor firms, this presents a huge growth opportunity in AI and sensor technologies. Automakers should integrate ADAS features into more models to meet increasing consumer demand and safety regulations.
11. The demand for memory chips (DRAM & NAND) in EVs is projected to increase at a CAGR of 15% due to infotainment and ADAS integration
Modern vehicles require vast amounts of memory to support AI-driven functions, navigation, and real-time data processing.
For memory chip manufacturers, the automotive market is becoming as critical as traditional computing. Automakers should invest in scalable memory solutions to future-proof their vehicles.
12. Tesla alone accounted for over 20% of automotive semiconductor demand in 2022, reflecting its leadership in EV technology
Tesla’s approach to vertical integration and proprietary chip design has set it apart from competitors.
Other automakers should follow Tesla’s lead by developing in-house semiconductor strategies or securing exclusive deals with chipmakers.
13. Automotive semiconductor shortages in 2021-2022 led to a production loss of over 10 million vehicles worldwide
The global chip shortage exposed the fragility of the automotive supply chain.
Companies must adopt multi-sourcing strategies to ensure a steady supply of semiconductors in the future. Building regional chip manufacturing hubs can also reduce dependence on overseas suppliers.
14. Infineon, NXP, Renesas, STMicroelectronics, and Texas Instruments control over 60% of the automotive semiconductor market
The automotive semiconductor market is dominated by a handful of major players. These companies have deep expertise in power management, microcontrollers, and sensor technology, which are essential for EVs and advanced driver-assistance systems (ADAS).
If you’re an automaker, understanding which companies control the semiconductor supply chain is crucial. Working with multiple suppliers can reduce risks and ensure production stability.
For investors, these leading semiconductor companies are well-positioned to benefit from the ongoing EV boom, making them strong investment opportunities.
15. China accounts for over 40% of global EV semiconductor demand, due to its massive EV production and sales
China is leading the EV revolution, producing and selling more electric vehicles than any other country. The Chinese government’s aggressive policies, incentives, and investments in EV technology have fueled this growth.
For semiconductor companies, having a presence in China or forming partnerships with local manufacturers can provide access to the largest and fastest-growing EV market.
Automakers looking to expand in China must ensure they have reliable semiconductor suppliers, as demand will continue to outpace supply.
16. The market for EV battery management system (BMS) semiconductors is expected to reach $7 billion by 2028
A battery management system (BMS) is one of the most critical components in an EV. It ensures the battery is operating safely, efficiently, and at peak performance. Without advanced BMS semiconductors, battery life and vehicle range would be significantly compromised.
For semiconductor manufacturers, this is an area worth focusing on. Developing energy-efficient and reliable BMS chips will make EVs more competitive. Automakers should prioritize working with BMS specialists to optimize their battery performance and lifespan.
17. Automotive analog IC sales are projected to exceed $20 billion by 2030, with EV power management driving growth
Analog integrated circuits (ICs) are crucial for managing voltage and power distribution in EVs. They help convert battery energy into usable power for different vehicle functions.
Companies that specialize in analog ICs are set to see massive growth in the coming years. Automakers should ensure they have robust power management solutions to enhance vehicle efficiency and reduce power losses.
18. The shift to Level 3+ autonomous vehicles will increase the demand for high-performance computing (HPC) chips by 5-7x
As vehicles become more autonomous, they require more powerful chips to process massive amounts of data in real-time. From sensor fusion to AI-based decision-making, Level 3 and higher autonomous vehicles rely heavily on high-performance computing (HPC) chips.
For semiconductor firms, investing in AI and automotive-grade HPC chips is a strategic move. Automakers should prepare for the future by designing vehicles that can integrate these advanced computing solutions, ensuring they remain competitive in the self-driving era.
19. EV motor control chips are expected to grow at a CAGR of 14% due to rising adoption of dual and tri-motor setups
EVs are increasingly using multiple motors for better performance, efficiency, and handling. Each of these motors requires sophisticated motor control chips to optimize power distribution and energy consumption.
For chip manufacturers, developing high-efficiency motor control solutions will be key to staying relevant in the EV space. Automakers should collaborate with semiconductor firms to create more efficient dual and tri-motor configurations, which can enhance driving dynamics and battery life.
20. ADAS semiconductor demand is forecast to reach $35 billion by 2030, fueled by safety regulations and EV integration
Regulations are pushing automakers to include more ADAS features like automatic emergency braking, lane-keeping assistance, and collision avoidance systems. All these systems rely on semiconductors to process data from cameras, radar, and LiDAR sensors.
For semiconductor companies, ADAS is one of the biggest areas of growth. Automakers should focus on making ADAS features standard in more vehicles to meet evolving safety regulations and consumer expectations.
21. By 2025, over 50% of all new vehicles will have some form of electrification, increasing semiconductor reliance
Hybrid and fully electric vehicles are becoming the norm rather than the exception. This means more vehicles will require semiconductor-heavy components like inverters, battery management systems, and power electronics.
Automakers must ensure they have strong relationships with semiconductor suppliers to handle this shift. Chip manufacturers should ramp up production to meet the growing demand for electrified vehicle components.
22. SiC semiconductor adoption in EVs is expected to surpass 60% by 2030, up from less than 20% in 2022
Silicon carbide (SiC) semiconductors are replacing traditional silicon-based power semiconductors because they offer higher efficiency and lower heat loss. This is particularly important for high-performance EVs that require fast charging and longer range.
For automakers, adopting SiC-based power electronics will give them a competitive edge. Semiconductor companies should continue improving SiC production techniques to lower costs and increase adoption rates.
23. The automotive semiconductor content per vehicle is expected to reach $1,200 by 2028, up from $650 in 2020
With EVs becoming more advanced, the number of chips in each vehicle is increasing significantly. This not only raises production costs but also makes supply chain stability more important than ever.
Automakers should focus on securing long-term chip supply contracts to avoid disruptions. Semiconductor firms should scale up production capacity to meet this rising demand.
24. AI chips for automotive applications are projected to grow at a CAGR of 20% due to autonomous and EV developments
Artificial intelligence is transforming the automotive industry. From self-driving technology to real-time traffic analysis, AI chips are becoming essential in modern vehicles.
Semiconductor firms should invest in automotive AI chip research and development. Automakers should integrate AI-driven features to enhance driver assistance, efficiency, and overall vehicle performance.
25. The global EV power semiconductor market is expected to reach $35 billion by 2030, driven by fast-charging and efficiency needs
Power semiconductors are critical for converting and managing electricity in EVs. With the rise of ultra-fast charging and high-efficiency drivetrains, demand for these components will keep rising.
For semiconductor manufacturers, developing high-efficiency power chips should be a top priority. Automakers should focus on integrating the latest power semiconductor technology to improve vehicle efficiency and charging speeds.
26. 48V mild hybrid systems will contribute to over 25% of automotive semiconductor growth by 2027
Not all electrification comes in the form of fully electric vehicles. Many automakers are adopting 48V mild hybrid systems to improve fuel efficiency and reduce emissions in traditional combustion cars.
For chipmakers, this means a growing demand for semiconductors designed specifically for hybrid applications. Automakers should consider offering mild hybrid options to appeal to a broader range of consumers.
27. The EV infotainment semiconductor market is projected to grow at a CAGR of 18%, driven by digital cockpits and AI assistants
EVs are becoming more than just vehicles; they’re turning into smart, connected devices. Large touchscreens, AI-powered voice assistants, and real-time connectivity require advanced infotainment chips.
For semiconductor companies, infotainment chips represent a major growth opportunity. Automakers should prioritize seamless user experiences to differentiate their vehicles from competitors.
28. The average EV contains over 1,000 semiconductor chips, compared to 400-500 in an ICE vehicle
EVs rely on semiconductors for nearly every function, from energy management to safety and connectivity. This underscores why the global chip shortage has had such a severe impact on the auto industry.
Automakers should build resilient supply chains to secure their semiconductor needs. Chip manufacturers must scale up production to keep pace with growing EV adoption.
29. Onboard chargers (OBCs) for EVs will require over $10 billion worth of semiconductors annually by 2030
Onboard chargers are critical for converting electricity from charging stations into usable battery power. As EV adoption grows, so does the demand for OBC chips.
For chipmakers, this is a clear area of growth. Automakers should focus on integrating high-efficiency OBCs to improve charging performance.
30. Wide-bandgap semiconductors (SiC & GaN) will make up over 25% of the automotive power semiconductor market by 2030
Wide-bandgap materials are revolutionizing EV power electronics by increasing efficiency and reducing heat loss. This makes EVs more powerful and energy-efficient.
For semiconductor firms, investing in SiC and GaN technologies is a smart long-term strategy. Automakers should prioritize these advanced semiconductors to maximize EV performance.
wrapping it up
The automotive industry is undergoing one of the most significant transformations in its history, and semiconductors are at the heart of this revolution.
The rapid growth of electric vehicles, the rise of advanced driver-assistance systems (ADAS), and the push for more efficient power electronics are fueling an unprecedented demand for chips.
This shift is not just a passing trend—it’s a fundamental change that will shape the industry for decades to come.
