The Top 5: Biggest Automotive Semiconductor Manufacturers

One of the most unexpected impact of the Covid pandemic has been felt in the automotive sector, where an acute shortage of microchips has roiled production schedules worldwide. An unexpected consequence of the massive use of electronics in vehicles today, the overall surge in demand for all electronics after the first 12 months outpaced the supply of semiconductors and their raw materials. For firms in the EV business, the effect is even more stark.

The global automotive semiconductor market size was estimated at $43.6 billion in 2021. On a total market size of $553 billion in 2021.  With the advent of electric vehicles, 3D mapping applications, automation of automobiles, etc., it should surpass $115 billion by 2030 for automotive sector.

It is worth noting that Taiwan Semiconductor Manufacturing Company, Limited (TSMC) is the world’s largest pure-play semiconductor foundry and is dominating the chip market. As a pure-play foundry, it hardly uses its own brand name on its products. To understand the extent of its influence, TSMC accounted for 54% of total foundry revenue globally in the year 2020.

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TSMC customers can be divided into three classes—integrated device manufacturers, systems companies, and fabless companies. Fabless firms are ones that design and sell chips, but farm out the business of actually making the things to Taiwan Semiconductor Manufacturing itself. TSMC produces more than 10,000 products for almost 500 clients worldwide. In fact, the company produces chips for some of the largest names in the world – Apple, AMD, Intel, etc. Even the biggest automotive semiconductor manufacturers who have their own fabrication facilities like Infineon, NXP, STMicroelectronics and Texas Instruments, have outsourced some of their production to TSMC. Hence, while we can list the apparent top manufacturers of chips for automobile industry, TSMC’s shadow will always loom over the numbers as a giant in a separate category by itself.

So, barring TSMC, who are the biggest automotive semiconductors manufacturers serving this market? What are their market shares? How are they performing? We look at the topmost players in the segment exposed to current challenges.

#1 Infineon Technologies AG (Germany)

Infineon Technologies is a German semiconductor manufacturer that makes chips for a number of automotive firms. The list includes big European players like Volkswagen. The pandemic-induced effects led Infineon to suspend some production last year. Infineon is a leading global high-performance semiconductor company with a 13.2 percent automotive semiconductor manufacturers market share in 2020.

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Infineon recently invested more than €2 billion in a new Kulim, Malaysia frontend fab to expand market leadership in power semiconductors. Once fully operational, the firm expects the new module to generate €2 billion in additional annual revenue every year.

Spreading a positive outlook, a top executive of Infineon said the chip shortage will end in 2023. Thus, to meet the growing demand, Germany-based Infineon plans to expand its production capacities. To this end, the firm has also made a 1.6 billion-euro ($1.8 billion) investment in its semiconductor plant in Villach, Austria.

In FY 2021, it ended with revenue of just over $12 billion, up 29 percent year on year.

#2 NXP Semiconductors N.V (The Netherlands)

Headquartered in Eindhoven, NXP Semiconductors N.V. (NXP) is a Dutch semiconductor designer and manufacturer. The company had been a major name in automotive semiconductors as it made 10.9 percent of the total market in 2020.

NXP has a broad portfolio of automotive chips, powering everything in cars, for instance, infotainment systems as well as tire pressure monitoring systems and V2X (vehicle-to-everything) communications.

NXP delivered full-year record revenue of $11.06 billion, an increase of 28 percent year-on-year. The company has a market cap of $48.19 billion.

#3 Renesas Electronics Corp. (Japan)

The Japanese heavyweight is one of the largest automotive chips manufacturers in the world. With over 50 percent of its revenues coming from the automotive sector, Renesas had an 8.5 percent market share in 2020.

Renesas Electronics is a global player not only in automotive semiconductors but also in microcontrollers and processors. This combination of digital and analog products creates a one-stop solution for automakers looking for the technology to back their vehicles. Its chips power camera and battery systems for companies in the key German and Chinese markets. The company looks to add more applications, such as higher-resolution rear-view cameras at a lower cost, in years to come

The company boasts a market cap of over $21 billion. Further, it had generated a revenue of $7.3 billion in 2021, a 12 percent rise from a year earlier.

#4 Texas Instruments, Inc. (U.S.)

Texas Instruments forms a complex list of products from cars to calculators. Nevertheless, it has been one of the largest players in the automotive semiconductor industry with some of the best margins in a competitive business.

Texas Instruments had an 8.3 percent market share in 2020. As of March 2022, Texas Instruments had a market cap of $165.38 billion, the highest on this list. Also, from all that it has to offer, Texas Instruments generated revenue of $18.344 billion in the same year.

#5 STMicroelectronics N.V. (Switzerland)

The Geneva-based chip maker has a major business focus on automotive semiconductors. STMicro’s biggest clients include the likes of electric-car maker Tesla and iPhone maker Apple. The French-Italian chipmaker made up 7.5 percent market share in the year 2020.

Firing all cylinders, the firm planned between $3.4 billion and $3.6 billion in capital spending this year. This is double the $1.8 billion it had spent in 2021.

STMicroelectronics earned 12.76 billion dollars in 2021, 24.9 percent higher than 2020. In March 2022, its market cap was $39.07 billion.