Autos fuel semiconductor growth

What tiny invisible product likely makes your car safer, more fuel efficient, and more comfortable? The same product that powers your laptop, smartphone, and mobile device. Growing demand for semiconductors in automotive applications is helping fuel chipmaker growth.

Semiconductors have played an increasing role in vehicle innovation. Sensors and actuators, both of which are used in automotive systems, rose 15.5 percent to $8 billion in 2011, compared to 0.4-percent growth for the entire chip industry. Likewise, auto sales rose 8 percent in first quarter 2012 compared to the same three months a year earlier.

Demand has been concentrated on such features as powertrain and hybrid electric vehicle system controls, LED lighting, and airbag systems. Companies that serve the automotive market have grown in kind. For instance, Infineon Technologies is moving forward with plans to open a new 46,000-square-foot engineering and testing facility in Livonia, Michigan. The auto business accounts for 43 percent of the company’s revenue.

“(Semiconductors) are the products that we make that people don’t see, but they’re there,” Infineon vp Shawn Slusser told the Detroit Free Press. “They make the car better. They make the car safer. They make the car more fuel efficient. They make the car more comfortable.”

Lee Simmons

Lee Simmons is a business writer in Austin. He covers the technology and media industries for Hoover's and offers random musings on the state of entertainment (among other pressing issues) for Bizmology. Follow him at Twitter.

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