Now Head-To-Head With Infineon in $18.4 Billion Marketplace

Boston, MA - May 14 2009 – The Strategy Analytics Automotive Electronics service report, “Automotive Semiconductor Vendor 2008 Vendor Market Shares,” reveals that Freescale’s previously undisputed lead in the automotive segment has disappeared. Its share now stands at 9.5%, head-to-head with its arch-rival, Infineon.

As an early entrant and innovator in the automotive semiconductor market, Freescale has traditionally enjoyed a significant lead over its nearest competitors.  Freescale’s setback is because it derives more of its revenues from the US automotive electronics market, which was the first region to feel the shock waves of the global economic crisis, than Infineon or its other competitors. 

The credit crunch and declining consumer confidence triggered by the Wall Street financial crisis hit US new vehicle sales and production first, resulting in significant demand declines  going into the fourth quarter of 2008.  Strategy Analytics’ analysis shows Freescale was not alone, with almost all automotive semiconductor vendors suffering reduced 2008 revenues compared to the previous year.

According to Chris Webber, VP of the Strategy Analytics Global Automotive Practice, “The first three quarters of 2008 actually provided good automotive revenue growth for Freescale and other vendors; however this was totally wiped out by the sharp downturn in the fourth quarter, resulting in global vendor revenues falling by almost 5%.  Vendors should plan for further declines in 2009, but 2010 is expected to bring a return to growth.”

“Although the short term outlook is bleak, there are significant opportunities for automotive semiconductor vendors in the medium and longer term, as increased electronics penetration is the only realistic way that the industry can meet future environmental and safety requirements,” added Ian Riches, Director, Automotive Electronics Service.