The market for automotive grade semiconductors will reach $16.3 billion in 2005, for year-on-year growth of 7.2%, according to Chris Webber, vice president, automotive practice, at Strategy Analytics. Semiconductor revenues will grow at a 7.8% compound rate between 2004 and 2009, while light vehicle manufacturing is predicted to grow at a 3.6% compound annual rate over the same periods, he said. Citing a new study, "Automotive Semiconductor Demand Forecast 2003 - 2012," Webber predicted that planned enhancements to vehicle performance, features and safety will drive automotive semiconductor revenues to $25.7 billion by 2012.

Vehicle makers are introducing electronically controlled innovations in order to meet tightening environmental and safety legislation and respond to consumer expectations of enhanced performance, comfort and infotainment. "Even in mature electronics application areas, such as powertrain, primary instrumentation and entertainment there's an incredible amount of semiconductor innovation going on behind the scenes," Webber noted.

"Added functions and the growing software content of these systems is driving microcontroller and memory demand. For example, we're seeing the first applications of 64-bit processors in instrumentation and infotainment systems. Sophisticated control and diagnostics requirements are driving integration innovations in analog and smart power ICs. Our analysis shows that a combination of new sensing applications, as well as the migration from passive to active devices will result in semiconductor-based sensors exhibiting the highest component growth rate."