Automotive chip market seen doubling to $122.8B by 2035

Market Research Future projects the automotive chip market will grow from $64.60 billion in 2026 to $122.80 billion by 2035, led by electric vehicles, software-defined cars, and rising demand for ADAS, infotainment, and connectivity chips. Asia Pacific is the fastest-growing region, while supply-chain localization and chiplet-based designs reshape competition.

Why it matters: - Automotive semiconductors are becoming core to vehicle performance, safety, connectivity, and automation. - The market is growing faster than the broader automotive industry as cars shift toward software-defined, connected, and electrified platforms. - Electric and highly automated vehicles require far more chip content per vehicle than conventional internal combustion models.

What happened: - Market Research Future projects the automotive chip market will rise from $64.60 billion in 2026 to $122.80 billion by 2035. - The forecast implies a 7.40% compound annual growth rate from 2026 through 2035. - The report says infotainment and connectivity chips reached $10.48 billion in 2025 as cockpit-domain controllers consolidated display, audio and 5G telematics onto single SoCs. - The report was published Aug. 27, 2026.

The details: - Automotive chips are specialized semiconductors built to handle extreme temperatures, vibration and electromagnetic interference. - The market includes microcontrollers and microprocessors, memory ICs, analog ICs, logic ICs, discrete power devices and sensors. - Silicon remains the dominant material, while silicon carbide and gallium nitride are gaining share in power electronics. - Microcontrollers and microprocessors anchor powertrain control, ADAS, infotainment and body electronics. - Memory ICs are gaining importance as software-defined vehicles require more data storage and faster access. - Discrete power devices such as IGBTs and MOSFETs support EV power electronics and charging systems. - Sensors including image sensors, LiDAR, radar and MEMS are expanding with ADAS and autonomous driving. - The 10–22 nm node segment is growing quickly as ADAS, autonomous driving and infotainment demand more performance and lower power use. - TSMC and Samsung hold substantial control over sub-16 nm automotive node capacity. - Silicon carbide is entrenched in traction inverters, especially in 800-volt architectures. - Gallium nitride is expected to grow in on-board chargers because it improves efficiency and reduces passive component size. - Passenger cars remain the largest vehicle class by volume. - Telematics and infotainment account for a significant share of demand. - OEM-installed chips dominate over aftermarket demand. - The report identifies Infineon Technologies, NXP Semiconductors, Renesas Electronics, STMicroelectronics, Robert Bosch, Microchip Technology, Texas Instruments, Broadcom, MediaTek and ON Semiconductor as key players. - Infineon leads globally on automotive revenue, followed by NXP and STMicroelectronics.

Between the lines: - The shift from distributed electronic control units to centralized compute architectures is changing chip design priorities. - Chiplet-based designs are emerging as a way to improve supply security and modular innovation. - Functional safety and cybersecurity are becoming major differentiators as vehicles take on more software and connectivity. - Government efforts such as the U.S. CHIPS Act and the European Chips Act are pushing more local production and R&D. - Trade controls and export restrictions are accelerating supply-chain localization and dual-sourcing strategies. - China, Europe and the U.S. are all pushing domestic semiconductor capacity for strategic reasons, not just commercial ones. - Domestic automakers such as BYD and Nio are integrating home-grown microcontrollers to reduce exposure to export controls.

What's next: - Asia Pacific is expected to stay the dominant and fastest-growing region, led by China’s vehicle market and new-energy-vehicle policies. - North America should see continued semiconductor investment tied to the CHIPS program and local sourcing by automakers. - Europe remains a high-spend market per vehicle as automakers accelerate BEV and ADAS deployment. - EV adoption, advanced fabrication nodes and software-defined vehicle platforms will remain the main growth drivers. - Supply-chain resilience, secure software stacks and validated hardware will shape which suppliers win future design slots. - The report points to continued demand for chips that support over-the-air updates, connected services and higher levels of vehicle automation.

The bottom line: - Automotive chips are moving from a support component to a strategic layer of the modern car, and that shift is expected to keep demand rising through 2035. - More information is available in the full report and the sample request.