Abstract
It' s no great secret that the world' s top automobile manufacturers are reeling
after a particularly bad 2008 that dropped total autos shipped to 65.6 million
from 69.1 million in 2007. As difficult as 2008 was, 2009 is predicted to be
even worse with 63.2 million autos to ship by year' s end. This underscores an
industry downturn in mature regions such as the United States, European Union,
and Japan that is now spreading to previously fast growing new markets, such
as India and China, because of the global financial and lending markets which
has significantly affected GDP growth and caused many consumers to hold off of
purchasing a new vehicle in the short term.
Part of the over $800 billion automotive market is the automotive
semiconductor market. This segment of the $200 billion chip industry was just
over $20 billion in 2008 and expected to contract to $15 billion this year.
Automotive semiconductors include optoelectronics, discretes, sensors, and
integrated circuits, including microcontrollers, logic, power management,
mixed signal products and memory. The market for semiconductors in the
automotive industry is growing at an average annual growth rate of 9 percent
each year, faster than vehicle production and slightly faster than automotive
electronics revenue.
Even though electronic content is steadily rising in cars and trucks, cost
containment is a critical industry issue. 2008 was a difficult year for these
major automotive electronics suppliers as global vehicle production and
consumption fell drastically, and 2009 is shaping up to be even worse with a
projected $3.2 billion in total infotainment semiconductor revenue, a drop of
23 percent. However, in order to return to profitability, suppliers must take
necessary painful steps in order to restructure their business models.
Positive profits are predicted to return by 2010 and will experience growth of
10 percent annually over the forecasted period which will cause the market to
reach $5 billion by 2014.
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