Due to weak demand in the front line, leading automotive semiconductor corporations are falling into a slump, while Chinese automotive semiconductor corporations are increasing their influence. The industry assesses the potential of Chinese automotive semiconductor corporations highly and believes that the market landscape may change soon.
According to business reports for the second quarter (January to March) of the fiscal year 2025 by Infineon, the world's leading automotive semiconductor company, the market dominance of global power semiconductor leaders is weakening. Power semiconductors, which are essential components that control power efficiency, influence the driving range of electric vehicles and the power consumption of home appliances.
According to the market research firm Omdia, cited by Infineon, the company's market share in power semiconductors last year was 17.7%, down 2.9 percentage points from the previous year. Second and third place companies, ON Semiconductor and STMicroelectronics, also saw their market shares fall by 0.5 percentage points and 1 percentage point, recording 8.7% and 7%, respectively.
Chinese corporations are increasing their market shares in the power semiconductor sector and making significant strides. Hangzhou Silan Microelectronics, a Chinese integrated semiconductor manufacturer, recorded a 3.3% market share in the global power semiconductor market, ranking sixth in the world. China's BYD, the world's leading electric vehicle manufacturer, ranked seventh with a market share of 3.1%, marking its first entry into the market's 'Top 10.'
The Chinese electric vehicle industry is strengthening its 'self-sufficient' supply chain, while traditional power semiconductor corporations are struggling due to a slowdown in the global electric vehicle market. BYD had been sourcing power semiconductors from foreign corporations until two years ago, but since last year has been fully operating its power semiconductor factory for use in electric vehicles.
While Chinese corporations continue to show growth, traditional players are failing to recover. Infineon's operating profit for the first quarter of this year was €318 million (about 500 billion won), a decrease of 36% compared to the same period last year. Infineon has downgraded its performance outlook for this year and reduced its total investment scale. ON Semiconductor reported an operating loss of $573 million (about 800 billion won) in the first quarter, while STMicroelectronics' operating profit saw a nearly 100% drop to $3 million (about 4.2 billion won) during the same period.
The market predominantly anticipates that the dominance of Chinese automotive semiconductor corporations will increase in the future. According to IT media outlet Digitimes, the Chinese automotive market, which was valued at 120 billion yuan (about 23 trillion won) last year, is projected to grow by over 25% annually, surpassing 300 billion yuan (about 59 trillion won) by 2030. However, China's self-sufficiency rate for automotive semiconductors is less than 15%. The localization rate for high-performance system-on-chip (SoC) and microcontroller units (MCU) is below 5%. In this context, the Chinese government is committed to increasing the localization procurement rate of automotive semiconductors to 25% by this year.
An industry official noted that 'as competition with local Chinese companies intensifies in the high-demand automotive chip market, it is becoming difficult to secure revenue.' They added, 'Corporations like Infineon are strategically pushing for 'doing business with rivals' by increasing collaboration with BYD, but as China's semiconductor self-reliance accelerates, they are burdened with securing market share and maintaining technological competitiveness.'