Frost: Increased Auto Electronic Content Spurs Demand for ASIC, ASSP, FPGA
August 16, 2007 // Published as a news service by IHS
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A proliferation of automobile electronic content is the result of government pollution guidelines, safety and security regulations and the ongoing oil crisis.
According to Frost & Sullivan, this growing need directly influences the markets of automobile application specific integrated circuits (ASICs), application specific standard parts (ASSPs) and field programmable gate arrays (FPGAs).
Recent analysis from Frost & Sullivan of the world automobile ASIC, ASSP and FPGA markets found earned revenues of $6.75 billion in 2006, with estimates to reach $10.26 billion in 2010.
"The automobile ASIC, ASSP and FPGA markets have witnessed significant increases due to the growth of end-user markets and expanding applications of integrated circuits (ICs) in automobiles," said Frost & Sullivan senior research analyst Bonnie Varghese.
"Moreover, the increasing luxury features in automobiles require very efficient solutions, thereby boosting market demand."
Analysts said rising fuel prices in the world market feed the demand for electric and hybrid vehicles, which in turn can boost the growth of electronics in automobiles.
Sales of ASICs, ASSPs and FPGAs have also improved due to integrated solutions, enabling manufacturers to lower costs by reducing the number of microcontrollers in automobiles.
Mandatory government regulations to enforce safety and security have greatly contributed to the growth of this market. In Europe, analysts said regulations - such as the electronic stability program (ESP), antilock braking system (ABS) and electronically-controlled independent suspension - will help generate substantial revenues.
In the Asian region, increasing sales of automobiles drives the growth of ASIC, ASSP and FPGA markets. Analysts said the Asian market also has the potential to become the key contributor to the overall automobile ASIC, ASSP and FPGA revenues.
Since safety, security, engine control features, telematics and driver information applications will likely advance in the future, the automobile ASIC, ASSP and FPGA markets appear poised for significant growth.
There exists intense competition in the market, however, especially among well-established segments, such as ASIC and ASSP. Analysts said these products are characterized by higher non-recurring engineering (NRE) and take a longer time to market, even though their unit and integration costs remain less than FPGAs.
Technological developments can help reduce the time to market and NRE cost in ASIC and ASSP. Similarly, analysts said developments in FPGAs can lower the unit and integration costs and improve performance.
"ASIC and ASSP segment participants can benefit by targeting growing and developing economies, such as Asia, where opportunities exist in the low cost and higher volume automobile applications," said Varghese.
Analysts said chipmakers can further resist competition by creating an extensive portfolio of core designs, developing world-class electronic design automation (EDA) software tools and proactively engaging with original equipment manufacturer (OEM) customers in accelerating the market share of programmable logic devices (PLDs).
Source: Frost & Sullivan.