TrendForce: Accelerated vehicle electrification and intelligence are expected to drive the automotive semiconductor market to nearly USD 100 billion by 2029.

According to the latest survey by TrendForce, as the automotive industry accelerates electrification and intelligent transformation, the global automotive semiconductor market is expected to grow steadily from approximately USD 67.7 billion in 2024 to nearly USD 96.9 billion by 2029, representing a compound annual growth rate (CAGR) of 7.4% from 2024 to 2029.

However, growth across automotive chip segments is highly uneven. High-performance computing (HPC) chips—represented by logic processors and advanced memory—are growing significantly faster than traditional components such as microcontrollers (MCUs). This divergence reflects a rapid concentration of market value toward core technologies that enable vehicle intelligence and electrification.

TrendForce research indicates that global electrified vehicle penetration (including BEVs, PHEVs, FCVs, and HEVs) in new vehicle sales is expected to rise to 29.5% in 2025. At the same time, the industry is accelerating vehicle intelligence, which relies on key elements such as multi-sensor configurations, high-speed communications, and AI model deployment. The transition of electronic and electrical (E/E) architectures from distributed designs to domain-centralized and centrally centralized architectures is also critical. The massive data volumes generated by multi-sensor setups, together with the rapidly increasing parameter counts of AI models, are driving exponential growth in demand for computing performance in vehicles.

In addition, automakers are pursuing varying degrees of integration across functional domains such as body control, remote processing, intelligent driving, and smart cockpits, with semiconductor suppliers playing a pivotal role in this process. As chipmakers introduce cockpit/ADAS integrated (or fused) system-on-chips (SoCs), 2025 is set to become the first year of commercial deployment for these solutions. Controller integration helps reduce the number of control units, enable shared electronic components, and simplify wiring harness layouts—delivering cost benefits that are expected to further accelerate the adoption of vehicle intelligence. TrendForce forecasts that automotive logic processors will achieve a CAGR of 8.6% from 2024 to 2029, outpacing the overall industry average of 7.4%.

Competition in Automotive Chips Intensifies: New Entrants Challenge Established Players

As growth rates vary across different semiconductor categories, competition among chipmakers has intensified significantly. NVIDIA, a dominant player in the server market, and Qualcomm, the leading smartphone chip supplier, are aggressively entering the intelligent automotive space by leveraging high-performance computing chips and rich hardware–software ecosystems. Chinese players such as Horizon Robotics are also rising rapidly, driven by technological advances, localization policies, and strong demand for high levels of vehicle intelligence.

While traditional automotive chip suppliers face growing challenges, their broad product portfolios, proven quality and reliability, and close customer relationships remain the foundation for competing with a wave of new entrants.

According to observations by TrendForce, the automotive semiconductor landscape is highly diverse, with each vendor facing a distinct mix of strengths and challenges. Capturing growth opportunities increasingly depends on building close, multi-party strategic alliances and developing strong hardware–software integration capabilities. Pure hardware performance competition is no longer the sole determinant of success.

Source: TADA (Taiwan Automotive Development Association)