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Analog ICs Cashing in on Auto

Online staff -- Electronic News, 11/24/2005

It’s not just gas prices going up, but car prices, as well.

A recent survey found that the total cost for a vehicle has risen almost $2,800, but, according to one firm, consumers are more willing to pay higher prices for vehicles when they expect to get a lot of value in return due to higher electronics contents in the average car.

“Part of the attraction must be due to the advances in automotive technology,” said Databeans in a recent research note. “A basic entry-level vehicle is enough to transport people from ‘here to there,’ but consumers seem to want more: the latest in entertainment, safety, navigation, or communication features, and of course just feeling more comfortable is a plus.”

The new electronic automotive applications require improved semiconductor content. Databeans estimates that automotive semiconductor content will be valued at around $250 per vehicle for 2006, based upon global unit shipments of 70 million. And the figure for a typical bill of materials will increase by $100 over the next four years.

According to Databeans survey data, analog ICs generated 29 percent of worldwide automotive semiconductor revenue for 2004. And the majority of automotive analog semiconductor content is ASIC/ASSP -- special purpose products made for either a particular OEM customer or for a particular application. This observation, said the firm, is consistent with the direction and climate of today's auto-making environment.

The Reno-based research firm estimates that the total automotive semiconductor market continues to become more attractive for analog suppliers, as well as ASSP and discrete solution suppliers. In 2004, this market was estimated at more than $17 billion. Growing at an average rate of 9 percent each year over the next five years, the automotive semiconductor market should reach more than $24 billion, Databeans concluded.