Increasing automobile sales drive the application-specific integrated circuit (ASIC) market. In particular, the growing global market for automotive ASICs will benefit from the Asian market’s revenue contributions. New analysis from Frost & Sullivan, World Markets for ASICs in Automobiles, finds that the market earned revenues of $2.99 billion in 2006 and estimates this to reach $4.10 billion in 2010.
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“Government pollution norms, safety norms, comfort features, and the oil crisis will likely drive the automotive semiconductors market,” notes Frost & Sullivan Senior Research Analyst Bonnie Varghese K. “The ASIC market appears set to witness future growth with the increase in electronic content aimed at eliminating human errors.”
In particular, the European region expects to generate more revenues than any other region due to their early technological acceptance and government regulations. Additionally, the Asian region continues to exhibit one of the fastest growth rates as it increasingly emphasizes highly customized applications such as engine control valve timing.
ASICs represent the most suitable option when volumes related to applications appear poised to experience significant growth. However, ASIC manufacturers will still face the challenge of matching performance requirements with a product’s cost.
“With increased competition, market participants feel compelled to offer reasonable prices,” explains Varghese. “Mainly the competition stems from field-programmable gate arrays (FPGAs), which took over some of the legacy applications that previously used ASIC/ application-specific standard product (ASSP).”
Higher non-recurring engineering (NRE) and longer time to market characterize ASIC products; however their unit and integration costs remain less than FPGAs.
Technological developments will likely help reduce the time to market and the NRE costs for ASIC, which will give the market a boost. Moreover, market participants should target growing and developing economies to take advantage of opportunities for low cost and higher volume automobile applications.
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Frost & Sullivan, a global growth consulting company, has been partnering with clients to support the development of innovative strategies for more than 40 years. The company’s industry expertise integrates growth consulting, growth partnership services, and corporate management training to identify and develop opportunities. Frost & Sullivan serves an extensive clientele that includes Global 1000 companies, emerging companies, and the investment community by providing comprehensive industry coverage that reflects a unique global perspective and combines ongoing analysis of markets, technologies, econometrics, and demographics.