Automotive embedded systems are electornic devices that are integrated into vehicles for facilitating advanced functionalities and safety. These systems consist of hardware and software components that perform dedicated functions such as ABS, navigation, engine management, entertainment, and telematics. The rising adoption of advanced driver-assistance systems and autonomous driving technologies has boosted the demand for automotive embedded systems in recent years.
The global Automotive Embedded Systems Market is estimated to be valued at US$ 18.12 Mn in 2023 and is expected to exhibit a CAGR of 23% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Opportunity:
The growing connectivity in vehicles represents a key opportunity for the automotive embedded systems market. The rising trend of connected vehicles that offers features such as vehicle diagnostics, telematics, navigation, and infotainment is boosting the demand for embedded systems. Advanced automotive embedded systems provide high-speed in-vehicle connectivity and communication between electronic control units. They allow real-time updates, enhance driver safety, and enable technologies such as advanced driver-assistance systems. The integration of 4G/5G connectivity in modern vehicles necessitates robust and efficient automotive embedded systems, thus fueling market growth over the forecast period.
Porter’s Analysis
Threat of new entrants: The automotive embedded systems market requires high R&D investments and costs for developing new technologies. This creates significant barriers for new companies to enter the market.
Bargaining power of buyers: Individual buyers have low bargaining power in this market due to the specialized nature of automotive embedded systems and consolidated supply. However, large automotive OEMs have moderate bargaining power due to their volume purchases.
Bargaining power of suppliers: A few large semiconductor companies dominate the supply of important components like processors, memory chips and Field Programmable Gate Arrays (FPGAs) in this market, giving them significant bargaining power over automotive OEMs and embedded systems manufacturers.
Threat of new substitutes: There are no close substitutes for specialized automotive embedded systems. However, advances in cloud computing and autonomous driving technologies may offer some alternative solutions in the long run.
Competitive rivalry: The market is growing rapidly due to advances in connected cars, autonomous driving and vehicle electrification. This is leading to intense competition among existing players.
SWOT Analysis
Strengths: Growing demand for connected and autonomous vehicles is driving the market. Embedded systems allow adding various advanced features at low costs.
Weaknesses: High R&D costs and frequent need to upgrade hardware and software. Dependence on a small set of semiconductor suppliers increases business risks.
Opportunities: Scope for consolidating electronics architectures. Increasing demand in electric vehicles, advanced driver assistance systems and vehicle-to-vehicle communication present growth avenues.
Threats: Slowdowns in the automotive industry directly impact this market. Stringent government regulations regarding component reliability and cybersecurity increase compliance costs.
Key Takeaways
The Global Automotive Embedded Systems Market Size is expected to witness high growth over the forecast period supported by automotive industry trends like vehicle electrification, connectivity and automation. The global Automotive Embedded Systems Market is estimated to be valued at US$ 18.12 Mn in 2023 and is expected to exhibit a CAGR of 23% over the forecast period 2023 to 2030.
Regional analysis: North America dominates currently due to early adoption of advanced vehicle technologies. However, Asia Pacific is likely to grow at the fastest pace led by China due to large automotive production volumes and presence of key market players.
Key players operating in the automotive embedded systems market are Broadcom Inc., Sicoya GMBH, GlobalFoundries Inc., Intel Corporation, Juniper Networks Inc., Cisco Systems Inc., IBM Corporation, and NeoPhotonics Corporation. Broadcom Inc. And Intel Corporation have emerged as the largest vendors providing automotive processors and networking chips.
The automotive embedded systems market is fragmented with Tier 1 suppliers collaborating with semiconductor manufacturers and software companies to deliver integrated solutions. Successful partnerships and consolidation activities are expected to strengthen competitive positions.
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