- The LED segment is estimated to be the fastest growing market in the automotive optoelectronics market during the forecast period, by devices.
- The safety application segment is estimated to be the fastest growing market in the automotive optoelectronics market during the forecast period, by application.
- North America accounts for the largest market share in the automotive optoelectronics market.
The Optoelectronics Market for automotive is projected to grow at a CAGR of 14.13% during the forecast period, to reach $9.80 billion by 2025. The high demand and increasing sales of premium segment vehicles and the rising awareness regarding vehicle safety performance are the major factors boosting the growth of automotive optoelectronics market globally.
The leading players in the automotive optoelectronics market are Osram (Germany), Hella (Germany), Texas (US), Broadcom (US), Vishay (US), Magneti Marelli (Italy), and Grupo Antolin (Spain).
The increasing consumer preference for connectivity features in vehicles and the increasing automation in the driving functions have accentuated the need for high-end electronics architecture in the vehicles. The growing electrification of various features in the vehicle would also act as a catalyst to the growing demand for optoelectronics automobiles. Rapid urbanization, especially in developing countries, has inflated the demand for commercial vehicles, which in turn would drive the growth of the automotive optoelectronics market.
The automotive optoelectronics market for safety application segment is estimated to grow at the highest rate during the forecast period. It is projected to grow at a promising CAGR from 2018 to 2025. The increasing mandates related to safety features in automotive across the globe along with high consumer preference for safety application have accelerated the growth of the automotive optoelectronics market. Leading automakers such as Honda (Japan), Ford (US), Hyundai (South Korea), Nissan (Japan), Toyota (Japan), and Daimler (Germany) offer various safety features that integrate optoelectronics devices for their smooth functioning. In addition, these manufacturers are consistently improving their technology with a strong focus on R&D.
The LED segment is expected to be the largest and fastest-growing segment of the automotive optoelectronics market, by devices. The increasing demand for ambient lighting to enhance comfort and safety is the key factor driving the growth of the segment. Also, major automakers prefer LEDs for the exterior lighting of the vehicles as they work in all environmental conditions and offer effective results. Low power consumption and longer span are also driving the growth of the LED segment in the automotive optoelectronics market.
The passenger car segment is expected to be the largest as well as the fastest-growing segment of the automotive optoelectronics market, by vehicle type. Increase in LED lighting and the demand for safety application in a passenger car are anticipated to drive the passenger car optoelectronics market. Thus, the increasing consumer base for passenger cars coupled with high demand for premium passenger cars has contributed to the growth of automotive optoelectronics market.
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North America accounts for the largest market share in the automotive optoelectronics market, followed by Europe and the Asia Pacific region. The demand for high-end, fast, and technologically advanced optoelectronics is high in the North American region. The US holds the maximum share of the North American market for automotive optoelectronics. Factors such as the rising demand for advanced features to improve vehicle safety performance with comfort & convenience, coupled with the increasing integration of advanced driving functions have collectively boosted the demand for the optoelectronics market.
The Asia Pacific region is projected to be the fastest-growing market for automotive optoelectronics during the forecast period. The market growth in the region can be attributed to the rapid growth of the automotive sector in countries such as China, Japan, South Korea, and India. Moreover, the improved lifestyle of consumers and rapid urbanization have boosted the demand for passenger vehicles, which, in turn, would trigger the growth of the automotive optoelectronics market in the region.
Increasing R&D in the field of optoelectronics technology
The research and development programs in the optoelectronic components market are focused more on the development of technology to meet the growing consumer demand and enabling integration of these devices into various automotive components. Various R&D communities are investigating optical and optoelectronic approaches for high-speed optical computing and next-generation communication networks. These research divisions are also trying to obtain the optimal combination of materials and devices to make functional elements that perform advanced optoelectronic functions, which will ultimately be used in photonic systems.
Rising demand for electric vehicles
According to the US Environmental Protection Agency, the transportation sector was responsible for nearly 28% of the total greenhouse gas emissions in 2016, becoming one of the leading causes of the increase in global temperature. Hence, various governments are promoting the use of electric vehicles for transportation as they significantly reduce automotive emissions.