source: TTI Europe Market Eye news
14.01.2016 // Posted by: Dennis M. Zogbi
Statements of fact and or opinions expressed in MarketEYE by its contributors are the responsibility of the authors alone and do not imply an opinion of the officers or the representatives of TTI, Inc.
The global market for cockpit electronics is expected to grow from $34.4 billion USD in 2015 to $55.1 billion USD by 2020; a cumulative five year growth rate of 60% in value. The value proposition for electronic component suppliers is that demand will increase based on increased unit production forecasts for automobiles and light trucks which is expected to grow as a result of churn rates in industrialized economies and net new product demand in emerging economies; coupled with advances in electronic content and functionality in existing electronic subassemblies; and demand for components for consumption in new and emerging electronic subassemblies.
A Boom Market for Cockpit Electronics: 2015-2020
Double-digit cumulative growth rates are expected for automotive electronic subassemblies consumed in automobile cockpits over the next five years. Within that core market there are three emerging platforms that stand to propel growth rates faster than other sub-sets and vendors of electronic components should have clear indications as to where to invest their time and money. These are “connectivity”, which is forecasted to grow at 900% cumulative between 2015 and 2020, and is expected to grow from $0.5 billion in sales globally in 2015 to $5.00 billion in sales by 2020; “Heads-Up-Display (or HUD)” which is growing from $0.4 billion USD in 2015 to an expected $1.2 billion USD in 2020- a 200% cumulative increase over five years; and “telematics” which is expected to grow from $1.4 billion in value for 2015 to $4.00 billion in 2020; which is a cumulative growth rate of 186% over five years. Here is a more granular description of each market opportunity
©2015 Paumanok Publications, Inc.; Based Upon Data Supplied In a Visteon Presentation at Barclays; Based Upon Data Provided to Visteon by Strategy Analytics and IHS.
The automotive connectivity market is expected to include multiple platforms in the Vehicle-to-Vehicle (V2V) and Vehicle-to-Infrastructure (V2I) radio communication frequencies that are used by vehicles to communicate with the highway infrastructure and to communicate with other vehicles. The initial phase will be to enhance driver safety and include such features as Emergency Electronic Brake Light Warning; Curve Speed Warning; Obstructed Stopped Vehicle Ahead Warning; Forward Collision Warning; Intersection Movement Assist; Lane Change Warning; Blind Spot Warning Traffic Jam Ahead Warning among other safety detection and other early warning electronics. A combination of top brand names in consumer electronics, such as LGE in Korea; and top brands in automotive electronics, such as Continental and Denso are already competing in the segment and each have expectations of significant growth over time because of the tremendous opportunity to save lives on global roads; a key factor compelling global purchasers and consumers in the worldwide sedan business. The higher growth rates than in other sectors is not only becoming a fact of enhanced driver and passenger safety it is a high-end automobile solution that is already standard equipment on mid-level models such as the Mazda CX5.
Heads Up Display
One of the fastest growth platforms in automotive cockpit electronics over the next five years will be in the Heads Up Display. The rapid track pathway for electronic components will expand on the global market coming almost exclusively from Japan, but with additional minor efforts in the United States and Germany. This technology has emigrated from fighter aircraft into the automobile. There are three types of technology the C-HUD, The W-HUD and Augmented Reality-HUD. The forecast is for C-HUD Technology to grow by a fantastic 400% cumulative rate between 2015 and 2020. C-HUD Systems will go in the higher end cars with growth expected to grow from $100 MM in value in 2015 to $500 MM in value in 2020. The C-HUD will have various display sizes and quality and use a kinematic driver combiner. W-HUD sales will grow from $0.3 to $0.7 BB USD, a cumulative growth rate of 133% over five years and be used in mid-level cars. Various displays and illumination styles will be available. The future development of HUD systems will involve TFT, laser or DLP displays, added lumens and electrical tilt features. High-end automobiles are expected to use W-HUD technology while Mid-Level Volume Growth will be in C-HUD Technology.
The other large growth segment in cockpit electronics will be in automotive telematics- or a suite of external communication technologies. This will include wireless gateway (WG), TCU and eCall technologies combined. Growth is expected to be a cumulative 186% over five years from the current level of $1.4 billion to $4.0 billion by 2020. Higher penetration rates in this segment are expected to drive prices down substantially. The wireless gateway market for automotive telematics will grow by an estimated 242% over five years and be the fastest growth business in automotive electronics. This will involve multiple access and wireless connections; data caching; Firmware Over The Air for engine control management; smart IP routing features and advanced security systems. Also experiencing rapid and continued growth will be the Telematics Control Unit (TCU Market), which has been enhanced to include Cellular, Bluetooth and Wi-Fi; to employ the Firmware remote diagnostics and vehicle functions; to use Internet connectivity and an IP router address per vehicle. This market is also growing rapidly and a TCU will contain a GPS, external mobile communication; microprocessor or FPGA; memory to store sensor data; sensors, capacitors, resistors and inductors. eCall systems will grow in value by an estimated 167% between 2015 and 2020. The eCall system such as OnStar will be expanded to include greater connected functionality and include basic functions like emergency assistance; stolen vehicle tracking and more advanced functions like ERA-GLONASS. Included in eCall is the ground-based ERA-GLONASS navigation information infrastructure is built to serve all roads in the country, and vehicles equipped with GLONASS/GPS navigation communication terminals (at the factory or a certified service center). In event of a traffic accident, the terminal will automatically collect data on its exact location, time, and severity, and transmit it with a high-priority alert to an ERA-GLONASS operator. Once verified, this information is passed on to the emergency response services (the 1-1-2 System or duty police stations). Vehicle driver and passengers can also contact an ERA-GLONASS operator manually – by pressing a special button.
Other Cockpit Activity to Watch
Automotive Infotainment Markets
The automotive infotainment system market is well established at $11.5 billion US dollars worldwide for 2015. The market is also undergoing a churn to advanced systems in top end cars, while continuing to benefit from unit growth in emerging entry level and throughout the mid-level markets. It is not as if electronics are increasing in value, it’s that electronics are getting more affordable and proliferating. In higher end automobiles the trend will be toward larger screen displays as much as one foot in length that will allow multiple user human interface and face recognition technology. The system will also interface with FOTA (Firmware Over The Air) which will continue to be a core growth platform technology that will emerge in many end-use subassembly systems in the car over time. Software platforms such as CarPlay, Android Café and Carlife will endear this technology to its owners. The Global automotive infotainment market continues to be crowded with a combination of traditional automotive electronics vendors such as Bosch, Mitsubishi and Denso; but the real drivers of the technology are consumer audio aftermarket giants such as Harman, Alpine, Mobis, Aisin and Clarion.
Automotive Instrument Cluster Markets
The automotive instrument cluster market will undergo an interesting change in the next five years as display technology advances. The instrument cluster market is expected to grow from $7 billion in value to $9.5 billion in value, which is a 39% cumulative rate of growth between 2015 and 2020. Vendors of instrument cluster displays expect a higher end shift in demand with 2.5 and 3-D graphics becoming more common with hybrid gages and 7-inch and 8-inch thin film transistor displays with rich 3-D graphics. Older technologies showing hybrid clusters, dot matrix and mono displays; or small and segmented LCD displays will drop off rapidly over the next five years as they are replaced by more advanced systems. The automotive instrument cluster market is dominated by a few vendors globally because of the required relationship between under the hood technologies; sensors and accurately displaying that technology to the driver. Continental, Denso and Visteon dominate the global market for automotive instrument clusters.
Automotive Audio Electronics Markets
The global automotive audio market will grow in value from $6.6 billion USD in 2015 to $8.4 billion in 2020, which is a cumulative growth arte of 27%. Lower end audio system demand will drop off sharply and be replaced by a movement to Display Audio Graphics; including larger capacitive display touchscreens and added Bluetooth, WiFi and USB connectivity. Overall unit demand will continue to be driven by net new product requirements driven by demand in emerging economies. The major automotive audio vendors continue to be brand name audio companies such as Panasonic, F-Ten, Harman and Clarion; but also captive OEM manufacturers such as Continental
Impact on Passive Components
The expected growth in automotive cockpit electronics will create market opportunities for specific types of passive electronic components. Historically, we have seen the cockpit of the automobile responsible for the largest percentage of aluminum electrolytic capacitors and DC film capacitors in the car audio system; and in fact the stereo would be the first major concentration of passive components in the car going back to the 1920s. However, the major growth areas going forward in connectivity, heads up display and telematics requires high frequency MLCC and thin film chip resistors to operate; as well as high frequency discrete inductors. There is also greater market opportunity for DC film chip capacitors for display backlighting in the advanced instrument clusters, as well as for V-chip aluminum electrolytic capacitors and for H-chip organic polymer capacitors used for ultra-small hybrid instrument and gage displays. There is also increased market opportunity for advanced under the hood NTC thermistors and PTC thermistors for temperature sensing of liquids to interact with the new 3-D rich graphic displays.
Ceramic capacitors have always been the primary electronic component found in the automobile, and this will continue over the next five years, however, we see new opportunity for high frequency ceramic capacitors operating at frequencies greater than 1 GHz in telematics, HUD and connectivity cockpit electronics markets. We also see opportunities for DC film chip capacitors in PPS or PEN dielectric for consumption in display backlighting as a growth market; and we see opportunities for V-Chip and organic polymer chip aluminum capacitors for display technologies in audio and infotainment subassemblies.
We see opportunities for thin film chip resistors that employ either nichrome film or tantalum nitride thin film coatings on alumina substrates also for connectivity, HUD and telematics applications in cockpit electronics. We also see greater market opportunity for NTC thermistor technologies for under the hood thermal sensing and communicating that information via firmware over the air (FOTA) technology.
There are opportunities for ferrite beads and wirewound chip coils also for connectivity, HUD and telematics applications in cockpit electronics, primarily to provide electromagnetic compatibility in communications modules used for vehicle-to-vehicle and vehicle-to-infrastructure communications.
Summary and Conclusion
Automotive cockpit electronics markets are expected to demonstrate 60% cumulative growth in dollar value between 2015 and 2020. The fastest growth electronic products in the cockpit will be connectivity, heads-up-display and telematics, which are expected to demonstrate cumulative growth rates of 900%, 200% and 186% respectively over the next five years. Passive electronic component markets will benefit from the growth expected in cockpit electronics and include increased demand for various types and capacitors, resistors and inductors with emphasis upon high frequency MLCC, high frequency thin film resistors, PPS and PEN film chip capacitors, V-Chip aluminum capacitors, organic H-Chip aluminum capacitors, ferrite beads and discrete inductors.