Market Trends of Discrete Semiconductor Industry
Automotive Segment Is Expected to Witness Major Growth
- Discrete semiconductors, such as diodes and transistors, are utilized in these systems to manage power flow and minimize energy losses efficiently. The demand for discrete semiconductors in the automotive industry is thus driven by the growing emphasis on vehicle electrification.
- Autonomous driving and ADAS technologies are revolutionizing the automotive industry, requiring sophisticated electronics and discrete semiconductors to enable real-time data processing, sensor fusion, and vehicle control. These systems heavily rely on high energy and power-efficient devices to ensure precise and reliable operation.
- Discrete semiconductors are crucial in enabling autonomous driving functions like adaptive cruise control, lane-keeping assist, and collision avoidance. The surge in demand for autonomous driving and ADAS technologies has consequently driven the need for high-energy and power-efficient devices in the automotive industry.
- Furthermore, with the transition to EVs, the number of car companies building SiC-based inverter prototypes has rapidly increased in the past few years. In the sector, the primary applications for SiC power MOSFETs, diodes, and modules are onboard electric vehicle (EV) chargers, DC/DC converters, and drivetrain inverters. Plug-in hybrid EVs and BEVs use onboard chargers to refuel the vehicle battery either at home or at a public charging station.
- Moreover, the global automotive industry is undergoing a significant transformation, as highlighted by the IEA, with potentially far-reaching implications for the energy sector. According to projections, the rise of electrification is anticipated to result in a daily elimination of the need for 5 million barrels of oil by 2030.
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China is Expected to Lead the Market
- The discrete semiconductor market in China is experiencing substantial growth due to the increasing number of industries in the country and their integration with automation to enhance return on investment. China has the largest manufacturing industry globally, contributing significantly to market demand. Manufacturing companies in China prioritize adopting 4.0 solutions to optimize and elevate their operations, thereby propelling market expansion.
- The growth of governmental initiatives in strengthening the country's semiconductor ecosystem and the country's emergence as a global producer of automotive and consumer electronic sectors would support the market’s growth.
- The market’s growth in the country is expected to be greatly influenced by the automotive segment, as there is a rising demand for discrete semiconductor devices in automotive manufacturing. For instance, in January 2024, the China Association of Automobile Manufacturers announced that China's automobile industry achieved a remarkable milestone, with production and sales surpassing 30 million units annually. This clearly indicates the immense growth potential of the automobile market.
- China's automotive sector experienced significant growth, solidifying the country's position as a key player in the worldwide automotive market. The Chinese government considers the automotive industry, along with its auto parts segment, to be crucial pillars of the nation's economy.
- The popularity of EVs is rising globally. China is a dominant adopter of electric vehicles worldwide. The country's 13th Five-Year Plan promotes the development of green transportation solutions, such as hybrid and electric vehicles, to advance the country's transportation sector.
- The government's efforts to attain carbon neutrality objectives by 2060 are projected to enhance the need for discrete semiconductors by leveraging the growth of various sectors, including the electric vehicle market. According to China's Development Plan for the New Energy Automobile Industry (2021-2035), electric vehicles could capture a 25% market share by 2025.
- Consequently, China is implementing more assertive measures to incentivize the adoption of electric vehicles, thereby expediting the adoption of discrete semiconductors for their extensive utilization in EVs. In August 2023, CAAM reported that China manufactured 589,000 battery electric vehicles (BEVs), comprising 551,000 passenger BEVs and 38,000 commercial BEVs. Additionally, 254,000 plug-in hybrid electric vehicles (PHEVs) were produced in China during the same month, with 253,000 being passenger PHEVs and 1,000 being commercial PHEVs.
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