Covid-19 hits automotive power chip market

June 04, 2020 //By Nick Flaherty
Automotive power chip market set for a 16 percent drop in 2020 as vehicle sales dive and production plunges says Omdia
The automotive power chip market is set for a 16 percent drop in 2020 as vehicle production plunges says Omdia

The Covid-19 outbreak has hit sales of automotive power semiconductors hard, resulting in a global market revenues falling 16 percent in 2020 says market researcher Omdia. However the market is predicted to recover in 2021 with continued growth in the following years.

The global impact of Covid-19 means worldwide revenue for power semiconductors in automotive applications will fall to $9.1bn in 2020, down from $10.8bn in 2019, according to Omdia’s Power Semiconductors in Automotive Report - 2020.

“The year 2020 had been expected to bring a rebound for the automotive power semiconductor market,” said Kevin Anderson, practice lead for power, automotive and industrial semiconductors for Omdia. “However, the Covid-19 pandemic shut down most automotive assembly plants for several weeks—first in China and then throughout the rest of the world. At the same time, demand for new vehicles has fallen as dealerships were closed and lost jobs and wage reductions in many parts of the world combined to slash demand.”

Even those plants that have reopened are not all operating at full capacity, due to component shortages and reductions in the numbers of employees on production lines as physical distancing measures are implemented. As a result, current new-vehicle build forecasts envision production of less than 70 million units in 2020, a decline of more than 20 percent from 2019.

Power semiconductor devices, including power discretes, power modules and power integrated circuits (ICs), are used extensively throughout automotive electronics systems.  This widespread adoption has propelled strong annual growth in the high-single-digit percentages for the automotive power semiconductor market in recent years.

However, 2019 brought a reversal in that trend. Trade tensions throughout the year combined with on-and-off tariff negotiations and the decline in some regional economies reduced vehicle builds and caused the automotive power semiconductor market to decline 1 percent compared to 2018.

After experiencing declines in the low single digits in 2019, discrete power semiconductors and power ICs for automotive applications are expected to post

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