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News Release from: Frost and Sullivan
Edited by the Electronicstalk Editorial
Team on 18 March 2004
Automotive IC sector demands balanced
approached
Semiconductor companies must achieve the ideal balance between technology, quality and price in order to succeed in a competitive passenger car market, a new study reveals.
Semiconductor companies must achieve the ideal balance between technology, quality and price in order to succeed in a competitive passenger car market where advanced comfort and safety features are constantly evolving New analysis from Frost and Sullivan on the European passenger car semiconductor market reveals that this market accrued revenues worth Eur 1.78 billion in 2003 and is poised to expand to Eur 3.5 billion by 2010
This article was originally published on Electronicstalk on 28 Jul 2006 at 8.00am (UK)
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Increasing use of electronic content in passenger cars, which represents approximately 25% of the costs and whose share is expected reach 40% by 2010, is likely to drive deployment of semiconductors.
Integration of high-level intelligence into passenger car features necessitates complex system-level solutions as opposed to conventional component-level solutions.
This trend is driving semiconductor manufacturers to broaden their product portfolio, providing scalable solutions for a single application.
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For example, functionalities such as antilock braking, distance warning and complementary metal oxide semiconductor cameras in safety systems result in development of multifeatured cars that claim a higher utility value.
Semiconductor companies are thus likely to experience heightened demand for 32bit microcontrollers with integrated functions and interfaces such as embedded Flash memory, controller area network, and local interconnect network interfaces.
"Advanced electronic content in conjunction with lengthy and expensive quality evaluation procedures requires higher investment from semiconductor manufacturers", explains Frost and Sullivan Research Analyst Ramanan Rajagopalan.
"Simultaneously upgraded high-quality products gain credibility with car manufacturers and command higher selling prices".
However, most semiconductor manufacturers have long-term pricing agreements with car manufacturers that prevent them from increasing average selling price.
Therefore, the challenge lies in developing advanced, yet cost-competitive solutions.
Understanding the difference between automotive and consumer electronics is expected to be crucial to achieving superior quality.
The consumer electronics sector is likely to compromise on quality, being a high-volume market with new technologies unfolding within a short period.
Conversely, penetration of technological advances into the automotive industry takes approximately seven years.
"Replacing a cellphone is more feasible than replacing a faulty car component as semiconductor products are expected to be adaptive to specific car models and survive for at least ten years in the market to facilitate replacement", says Rajagopalan.
A common technology platform between consumer electronics and the automotive segment is likely to provide a distinct competitive edge and generate considerable cost savings for semiconductor companies that supply solutions for Driver Infotainment features.
For example, semiconductor companies may harness their technical expertise in digital radios for driver infotainment systems, and similarly, credibility in digital television may assist in building successful video entertainment solutions for cars.
Working in tandem with car manufacturers and system suppliers enable semiconductor companies to combine their technical expertise with application-level knowledge, guiding them through the product specification and design processes.
This provides greater insight into customer needs and assists in creating customer-specific system-level solutions.
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