Rising incidents of cyber-attacks is one of the reasons which may mainly hamper the global market for automotive Ethernet solutions. Also, the vendors in global automotive Ethernet market across the globe are mainly affected due to the declared industrial shutdown owing to COVID-19, which is negatively affecting the global industry.
The notable adoption of advanced driver-assistance systems (ADAS) in vehicles is anticipated to create extensive industry opportunities for the global automotive Ethernet market. ADAS technologies have remarkably decreased the complexity of driving, with key features including emergency braking, lane monitoring, stability controls, and others. In addition to this, Broadcom Inc., global technology leader that develops semiconductor and infrastructure software solutions, is also coming up with novel technological advancements. For example, in October 2018, Broadcom Inc., announced its recent portfolio of automotive Ethernet devices mainly developed to advanced driver assistance systems (ADAS) and other advances in-vehicle application platforms. Such product innovations may create favorable conditions for the global automotive Ethernet market in the future.
The global automotive Ethernet market is estimated to be valued at $6,494.8 million by 2027, surging from $1,920.9 million in 2019 at a noteworthy CAGR of 20.8%.
Impact Analysis of COVID-19 on the Automotive Ethernet Market
The global spread of COVID-19 and the efforts to control it have decelerated the global economic activity as well as decreased the growth of the automotive Ethernet market worldwide. The pandemic has resulted in authorities across the globe implementing multiple unprecedented measures including factory and office shutdowns, quarantines, and travel restrictions. These measures have drastically impacted and will likely continue to impact workforce and operations of global automotive Ethernet market in the coming years. However, certain key players like Broadcom, Inc., a notable American fabless semiconductor company, followed multiple strategies like expansion of the customer reach and innovative product launching. For instance, in November 2020, Broadcom Inc. announced the world’s 1st automotive IEEE 802.3ch multigigabit PHYs (BCM8989X) and multilayer Ethernet switche (BCM8957X) with MACsec Support. This innovative Ethernet product mainly provides high bandwidth application, time-sensitive networking, and advanced security, to the evolving connected vehicles. Such company innovations may create lucrative opportunities, after the COVID-19 pandemic.
Global Automotive Ethernet Market Analysis
For electric vehicles (EVs), especially hybrid (HEVs), automotive Ethernet plays a significant role in the communication architecture layer that enables the link between the automotive IoT (Internet of things) and vehicle electronics. Also, automotive Ethernet provides a suitable topology for electric vehicles (EVs). These elements may increase the adoption of automotive Ethernet technology in EVs manufacturing.
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Furthermore, the compelling adoption of EVs particularly in the developed as well as developing nations may further lead to boost the growth of global automotive Ethernet market. For instance, according to the Auto Alliance, a leading advocacy group for the auto industry, in the U.S., 2018 year witnessed lucrative growth in EV sales to 328,188 at the impressive growth rate of 63.33% from 2017. Also, China is one of the leading countries in EV sales, representing 105% of massive growth in the 1st half of 2018. Above-stated factors showcase that the demand for EVs and their accessories are expected to increase, which may eventually drive the global automotive Ethernet market, in the coming years.
Global Automotive Ethernet Market, Segmentation
The global automotive ethernet market is segmented based on components, application, vehicle type, and region.
The components segment is further classified into hardware, software, and services. The hardware subsegment of global automotive Ethernet is anticipated to have the prominent share in 2020 and is anticipated to register a revenue of $4,357.8 million by 2026.
The significantly rising demand for ADAS (Advanced driver-assistance systems) and infotainment has propelled OEMs in automotive industry to adopt Ethernet hardware components such as bridges repeaters, routers, gateway, and others. Also, key features offered by automotive Ethernet technology such as speed, scalability, low latency, and higher bandwidth are also projected to spur the demand for hardware subsegment, in the analysis period.
The applications segment is further divided into infotainment, chassis, power train, body and comfort, driver assistance, and others. The driver assistance application of the automotive Ethernet industry is anticipated to have the notable growth and it is expected to register revenue of $2,642.7 million by 2027, with the rise from $734.1 million in 2019.
The growth of driving assistance subsegment of automotive Ethernet market is mainly attributed to the key factors including increased requirement for comfort combined with high demand for safety features. However, complex structure, high initial cost, and lower efficiency in bad weather conditions, are some of the reasons hampering the subsegment’s growth. Contrary to this, novel technological innovations in ADAS are further expected to provide a remarkable opportunity for the sub-segment, in the coming years.
The vehicle type segment is further categorized into passenger cars and commercial vehicles. The commercial vehicle sub-segment is anticipated to have a lucrative growth in the global market and register a revenue of $2,073.3 million during the analysis timeframe.
The commercial subsegment of global automotive Ethernet technology provides key features like park assist systems (PAS), forward collision warning (FCW), and tire pressure monitoring system (TPMS). Continuous investment in automotive infrastructure development, massive growth in financing options, and rising expenses on research and innovations by the automotive companies are key factors significantly impacting subsegments growth.
The automotive Ethernet market for Asia-Pacific region accounted for $620.5 million in 2019 and is further anticipated to generate a revenue of $2,175.8 million by 2027. Over the past years, the number of road traffic accidents have increased noticeably especially in India and China. For example, in 2018, National Bureau of Statistics, a deputy-cabinet level agency of China, documented around 63,194 traffic accident fatalities in 2018. Also, as per data published by Ministry of Road Transport and Highways (MoRTH), a ministry of the Government of India, the country reported approximately 467,044 road accidents in 2018. These figures showcase that the demand for Advanced Driver Assistance Systems (ADAS) is projected to grow exponentially, which may propel the APAC automotive Ethernet market, in the analysis timeframe.
Key Players in the Global Automotive Ethernet Market
- Vector Informatik GmbH
2. NXP Semiconductors N.V.
3. Marvell Semiconductor, Inc.
5. Broadcom Inc.
6. Microchip Technology Inc.
7. Aukua Systems
8. Texas Instruments Incorporated.
9. Keysight Technologies
10. Cadence Design Systems, Inc
Along with the company profiles of the key players in the market, the report includes the Porter’s five forces model that gives deep insights into the competitive environment of the market.
Porter’s Five Forces Analysis for the Global Automotive Ethernet Market
- Bargaining Power of Suppliers: Suppliers are providing a wide range of products to the customers and this is significantly rising the suppliers’ bargaining power.
Hence, the bargaining power suppliers is high.
- Bargaining Power of Buyers: Global automotive Ethernet industry holds few consumers which raises the bargaining power of customers worldwide. Also, switching cost in the automotive Ethernet market is less which is raises the buyers’ bargaining power.
Thus, the bargaining power of the buyers is moderate.
- Threat of New Entrants: Startups coming in the global automotive Ethernet industry are innovating novel automotive Ethernet services which mainly helps automotive industry engineers to manufacture high-performance products that improve safety in driving conditions and enable emerging ADAS system. Moreover, these ventures are following effective strategies like collaborations, and heavy expense on research activities.
So, the threat of the new entrants is high.
- Threat of Substitutes: There is no alternative product for automotive Ethernet system.
Thus, the threat of substitutes is low.
- Competitive Rivalry in the Market: The competition among existing firms is rather intense, particularly between the key companies such as Molex and Broadcom Inc. These companies are launching their value-added products & services in the global market to strengthen their position across the globe.
Therefore, competitive rivalry in the market is high.
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