Car makers keep the cash flowing for the power semiconductors sector

Ask any manufacturer in the semiconductor business which market sector is their rock-solid banker, the one that not only ticks over year after year but steadily grows, and most will say automotive.

And this has been the case since the upsurge of electronics in car design took off in the sixties. Unlike the volatile vagaries of the communications and pc markets, the automotive sector has consistently proved to be a reliable consumer of electronics technology.

Back in the 1960s the value of electronics in cars represented a mere 3% of the total value of the vehicle. Today it's just over 30% and is expected to hit approximately 47% in a dozen years. Not surprising then that chip makers love car makers.

Also unsurprising are the results of a couple of surveys from industry analyst that hit my desk this week saying that discrete semiconductor power products are currently experiencing the best sales growth seen this decade.

What may surprise some people though is that buoyant trend does not involve the power module market which is experiencing a generally slower market phase. However, this situation is partly due to a sluggish industrial sector and in actual fact the active automotive market is helping some module makers maintain a healthy balance sheet.

Of particular influence here is the trend towards electric vehicles (EVs) and this of course is being driven by the perceived environmental advantages related to decreasing air pollution that EVs offer, although as I have already highlighted in this column previously not all aspects of the trend towards electric vehicles are planet Earth friendly. Read more here;

Are electric cars environmentally deadlier than the diesel? Part I

Are electric cars environmentally deadlier than the diesel? Part II