Vehicle electrification push lifts automotive semiconductors toward $100bn
TrendForce expects the rapid acceleration of vehicle electrification and “vehicle intelligence” to drive strong growth in automotive silicon over the next five years. According to the research firm, the global automotive semiconductor market is projected to rise from about $67.7 billion in 2024 to nearly $96.9 billion by 2029, a 7.4% CAGR over the 2024–2029 period.
For eeNews Europe readers, it is clear that the center of gravity in automotive electronics is shifting toward high-performance compute, connectivity, and AI-enabling silicon. Such a shift has implications for product roadmaps, supply strategies, and the competitive landscape across European Tier 1s, OEMs and semiconductor vendors.
HPC chips outpace traditional components
TrendForce notes that growth across automotive semiconductor categories is “highly uneven.” High-performance computing (HPC) devices — including logic processors and advanced memory — are expanding significantly faster than more traditional automotive components such as microcontrollers. This divergence reflects, according to the release, a rapid reallocation of market value toward the core technologies required to support electrified powertrains and software-driven vehicle intelligence.
The firm also highlights the pace of electrification. Global EV penetration — including BEVs, PHEVs, FCVs, and HEVs — is expected to reach 29.5% of new-vehicle sales. At the same time, automakers are “fast-tracking vehicle intelligence,” which increasingly relies on multi-sensor configurations, high-speed connectivity and the deployment of AI models.
E/E architectures move to centralized compute
A parallel transition is underway in vehicle electrical/electronic (E/E) architectures, which TrendForce says are evolving from distributed systems to domain-centric and ultimately fully centralized designs. As sensor data volumes grow and AI models become more complex, demand for automotive compute capacity is climbing sharply, the company reports.
Automakers are exploring different levels of functional integration in body control, telematics, intelligent driving and smart cockpits — areas where chip suppliers play a pivotal role. According to the release, 2025 marks the beginning of commercialization for integrated cockpit-ADAS SoCs, as this converged architecture starts to move into production.
Controller consolidation reduces the number of ECUs, enables component sharing, simplifies wiring harnesses and delivers cost benefits that TrendForce believes will further accelerate adoption of vehicle intelligence. The firm estimates automotive logic processors will grow at a CAGR of 8.6% from 2024 to 2029, outpacing the overall market.
New entrants turn up the competitive heat
With growth rates diverging across semiconductor segments, TrendForce observes that competition is intensifying. Nvidia and Qualcomm are pushing hard into automotive intelligence by leveraging high-performance processors and broader hardware-software ecosystems. Meanwhile, Chinese suppliers such as Horizon Robotics are rising quickly on the back of technology gains, localization policies and demand for intelligent vehicle solutions, TrendForce indicates.
Traditional automotive semiconductor suppliers face increasing pressure, but TrendForce argues their “broad product portfolios, proven reliability, and deep customer relationships” remain important advantages. The company concludes that long-term success will depend on strategic alliances and stronger hardware-software integration.
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