Automotive semiconductors enter a phase of structural expansion, with power device supply and demand potentially tightening again

Overview

The report focuses on the resilience of the automotive semiconductor supply chain, arguing that while global vehicle production growth is limited, electrification, hybridization, software-defined vehicles, advanced driver assistance systems, and centralized computing will continue to increase semiconductor content per vehicle. The product mix will shift further from traditional analog, power, MCU, and sensors toward memory and SoCs; meanwhile, electricity demand from artificial intelligence data centers, together with recoveries in automotive and industrial cycles, may jointly tighten power semiconductor supply. Regionally, China has become the main engine of growth in automotive and automotive semiconductor demand, but high-value products still rely relatively heavily on overseas suppliers, and supply chain resilience also depends on control capabilities in packaging, testing, and logistics beyond wafer fabrication.

Core views

First, the long-term growth of automotive semiconductors is driven mainly by value content per vehicle rather than vehicle production, with the industry expected to maintain a CAGR of about 12% from 2025 to 2030. Second, software-defined vehicles will significantly increase demand for memory, SoCs, and high-performance computing, with memory likely to become the largest automotive semiconductor category. Third, electrification continues to support demand for analog and power devices, and demand growth for power semiconductors is expected to significantly exceed capacity growth. Fourth, automotive semiconductor downcycles are usually shorter and shallower, and supply chain safety inventories may remain above pre-pandemic levels for the long term. Fifth, China leads in manufacturing capacity but remains limited in value capture, while global localization and geopolitical changes will reshape the supply chain.

Analysis framework

The report combines data from Gartner, SEMI, and industry companies to forecast market size, value content per vehicle, application and product mix, end-market penetration, and capacity growth from 2025 to 2030, and identifies potential beneficiaries through historical cycles, inventory changes, regional supply and demand, and vendors' competitive positions.

Methodology notes

• Growth AnalysisVolume-Price and Semiconductor Content per Vehicle Decomposition

  Distinguish between vehicle production growth and semiconductor content growth per vehicle

  Global vehicle production is expected to remain in low growth, while expansion of the automotive semiconductor market is mainly driven by electrification, intelligence, and software-defined architectures increasing chip usage and value content per vehicle.

• Industry Structure AnalysisApplication and Product Mix Analysis

  Break down the market by ADAS, HPC, xEV, as well as memory, SoC, power devices, and MCU

  Assess the degree of structural benefit for memory, SoCs, and power devices through growth rates and market share changes across different applications and products.

• Supply-Demand AnalysisSupply-Demand Gap Analysis

  Compare demand growth with wafer capacity expansion speed

  Power semiconductor demand is expected to grow by about 14%, while capacity growth is about 6%, leading to the conclusion that the industry may see shortages and a more favorable pricing environment.

• Regional Competition AnalysisLocalization and Supply Chain Resilience Analysis

  Compare regional demand, wafer capacity, supplier revenue share, and supply chain control capabilities

  Analyze the mismatch among China, the United States, and EMEA in manufacturing capability, value capture, and automotive semiconductor demand, and emphasize that packaging, testing, and logistics are also key links in supply chain resilience.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Infineon Technologies AG (IFX.GR)

  Key beneficiary in power semiconductors and automotive semiconductors

  Strengths

  Automotive exposure is about 50%; the company is a leader in power semiconductors and has the industry's largest capacity. Capacity crowding from artificial intelligence demand and tightening automotive MOSFET supply may bring share and pricing benefits.

  Weaknesses

  Earnings remain affected by automotive and industrial cycles, inventory adjustments, and changes in capacity utilization.

  Comparison

  Compared with Silan, the second-largest power semiconductor capacity provider, Infineon's capacity is more than twice as large, and its capacity is expected to grow by about 10% over the next two years, above the industry growth rate of about 6%.

  Risks

  Automotive demand recovery weaker than expected, supply expansion faster than demand, price improvement falling short of expectations, and intensifying competition from local Chinese suppliers.

• Renesas Electronics Corp (6723.JP)

  Beneficiary of automotive SoCs and the automotive semiconductor cycle

  Strengths

  Automotive exposure is about 50%, and the company has a strong market position in automotive SoCs, benefiting from the penetration of software-defined vehicles, centralized computing, and advanced driver assistance systems.

  Weaknesses

  The relative importance of MCUs declines under centralized and zonal electronic architectures, and the industry is expected to maintain only about a 5% CAGR.

  Comparison

  Compared with Infineon, which is strong in power semiconductors, Renesas' core benefit is more tilted toward SoCs, MCUs, and automotive computing platforms.

  Risks

  Software-defined vehicle penetration slower than expected, weakening automotive cycle, extended inventory adjustment, and slowing growth in the MCU product mix.

Key data

• Global automotive semiconductor marketUSD 87 billion (2025) increasing to USD 151 billion (2030)Expected CAGR of about 12%, mainly driven by the increase in semiconductor content per vehicle.
• Semiconductor content per vehicleAbout USD 900 (2025) increasing to nearly USD 1,600 (2030)It was about USD 338 in 2015; memory, power devices, SoCs, and optoelectronics are the main sources of incremental growth.
• Incremental value for battery electric vehiclesAbout USD 600 higher than internal combustion engine vehiclesMainly from power and analog semiconductors required by electric powertrains.
• Penetration rate of assisted and autonomous driving functions30% (2025) increasing to 55% (2030)L2+/L3/L4 penetration is expected to rise from less than 10% to more than 20%.
• ADAS market sizeUSD 51 billion (2030)Expected to account for more than one-third of the automotive semiconductor market, with a CAGR of about 17% from 2025 to 2030.
• Automotive HPC growth rateCAGR of about 18% from 2025 to 2030Centralized computing, sensor fusion, and artificial intelligence inference drive computing demand.
• BEV penetration rate16% (2025) increasing to about 37% (2030)PHEV and HEV penetration is expected to rise from 22% to 24% over the same period.
• xEV-related semiconductor demandUSD 16 billion (2025) increasing to nearly USD 30 billion (2030)Expected CAGR of about 12%.
• Automotive memory revenueUSD 12 billion (2025) increasing to USD 36 billion (2026)Short-term growth is mainly driven by rising memory prices, after which increased DRAM content per vehicle is expected to offset declines in average selling prices.
• Automotive SoC revenueUSD 17 billion (2030)Expected to account for about 11% of the automotive semiconductor market.
• Analog and power device marketAbout USD 25 billion (2025) increasing to more than USD 41 billion (2030)As xEV penetration accelerates, market share is expected to recover in the later period.
• Power semiconductor supply-demand growth ratesDemand about 14%, capacity about 6%Artificial intelligence data center power demand and automotive recovery may create a significant supply-demand gap.
• Power semiconductor capacity11.2 million wafers/month (2025) increasing to 12.6 million wafers/month (2027)Calculated on an 8-inch equivalent wafer basis.
• China's share of automotive productionAbout 36% of global production (2025)Expected to remain at a similar share around 2030.
• Share of domestic suppliers in China's automotive semiconductor marketAbout 20% (2023) increasing to 25% (2025)Power semiconductor localization is relatively high, but MCU and PMIC penetration remains low.
• Global analog semiconductor wafer capacity shareChina 34%, EMEA 23%, United States 14%Chinese vendors capture only about 15% of analog semiconductor revenue, while U.S. vendors account for about 47%.

Impact & implications

At the industry level, the growth center of gravity for automotive chips will continue to be higher than vehicle production, with structural opportunities in memory, SoCs, power devices, and optoelectronics superior to MCUs. On the supply side, artificial intelligence power demand may crowd out traditional automotive and industrial capacity, and if the automotive cycle turns upward at the same time, prices for power devices, and even analog and MCUs, may improve. At the company level, vendors with leading capacity, high automotive exposure, and competitive advantages in power devices or automotive SoCs are more likely to gain share and earnings leverage.

Risks

• Global vehicle production or new energy vehicle penetration may be lower than expected, weakening industry expansion driven by growth in value content per vehicle.
• Memory prices may fall rapidly after capacity expansion, causing automotive memory revenue growth to be lower than forecast.
• New wafer capacity may be released faster than demand growth, triggering renewed oversupply, extended inventory digestion, and price declines.
• Sustained artificial intelligence demand may continue to crowd out power device capacity, potentially causing automotive supply shortages and constraining vehicle production.
• Geopolitics, export restrictions, and cross-regional supply chain disruptions may increase manufacturing, packaging, testing, and logistics risks.
• Accelerated localization by Chinese suppliers may compress overseas IDMs' market share and pricing power.
• Deployment of software-defined vehicles and advanced driver assistance systems may proceed more slowly than expected, dragging on memory, SoC, and HPC demand.

What to watch

• Whether the approximately 14% growth expectation for power semiconductor demand can continue to exceed the approximately 6% capacity growth rate.
• The scope of price increases, order visibility, and changes in capacity utilization at Infineon and other analog IDMs.
• Whether automotive supply chain inventories re-enter a restocking cycle after normalizing at the end of 2025.
• The pace of normalization in automotive memory prices and whether growth in DRAM capacity per vehicle can offset the decline in average selling prices.
• Actual penetration rates of BEVs, L2+ advanced driver assistance systems, and software-defined vehicles.
• The share of local suppliers in China's automotive semiconductor market and their breakthroughs in MCU, PMIC, and high-end power devices.
• The crowding-out effect of artificial intelligence data center power capacity on the supply of automotive and industrial power devices.
• Localization progress in packaging, testing, and logistics, as well as geopolitical disruptions.