New top spot in automotive semiconductor industry as we move past recession

Dan Comand
May 11, 2010
Written by
Long-term automotive semiconductor market leader Freescale has been displaced by its arch-rival Infineon, as revealed in the Strategy Analytics Automotive Electronics service report, “Automotive Semiconductor Market Shares 2009: Infineon Takes Top Spot from Freescale.”
As an early entrant, Freescale had enjoyed a significant lead over its nearest competitors since the outset of the automotive semiconductor market. However, the latest vendor rankings from Strategy Analytics shows that Infineon achieved $1.31 billion in CY 2009 automotive revenues (9% share) 2009 compared to Freescale at $1.163 billion (8% share).

In 2009, automotive semiconductor demand fell for an unprecedented second year in a row. Infineon’s total automotive revenues also fell in both years, but in each case Infineon fell to a lesser degree than Freescale. Also, Freescale had the greatest exposure from the North American market - which suffered the greatest regional declines in 2008 and 2009. Finally, in 2009, Infineon found some very modest growth from the emerging economic regions, while Freescale’s emerging region revenues declined.

None of the automotive semiconductor vendors escaped unscathed from the drastic declines in automotive demand precipitated in the latter part of 2008, resulting in an average year-on-year company revenue decline of 22%. Compared to 2008, each of the top 3 vendors - Infineon, Freescale, and ST - actually lost market share to some degree.

According to Chris Webber, VP of the Strategy Analytics Global Automotive Practice, “The automotive semiconductor market virtually ground to a halt in the first quarter of 2009, as falling OEM demand was exacerbated by inventory destocking in the supply chain. The high resurgence in demand that ensued in the third and fourth quarters was too little, too late to avoid significant 2009 revenue declines for all semiconductor vendors.”

Looking forward, the outlook is much brighter. “Supplier restocking activity and a real recovery in OEM demand will ensure a return to growth for vendors in 2010. In the medium and longer term, further growth will be driven by increased electronics penetration, particularly because the industry needs to meet future vehicle environmental and safety requirements,” added Ian Riches, Director, Automotive Electronics Service.

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