The surging use of advanced driver-assistance systems (ADAS) and smart infotainment systems in automobiles and plunging cost of the ethernet technology are expected to drive the automotive ethernet market at a CAGR of 19.4% during the forecast period (2021–2030). Moreover, the soaring investments in the connected car field will aid the market revenue in rising from ~$2 billion in 2020 to ~$10 billion by 2030. In recent years, the increasing adoption of autonomous vehicles and connected features in conventional vehicles has become a prominent market trend.

The rising integration of safety and security systems is one of the key growth drivers for the market. Human errors, such as failure to pay attention, inappropriate speed, and inadequate distance from the vehicle in front, are responsible for most road accidents. To mitigate road accident cases, governments of various countries have issued numerous regulations regarding the integration of safety systems in automobiles. As a result of these regulations, automakers are installing connected safety and security solutions in their offerings, thereby creating a high requirement for internet connectivity.

Another growth driver for the automotive ethernet market is the burgeoning focus on greater passenger conveniences in automobiles. The adoption of advanced solutions, such as connected devices, communication features, and artificial intelligence (AI) technology, is resulting in the development of innovative solutions aimed at enhancing customer satisfaction and improving the driving experience. Moreover, the increasing complexities of the electronic systems of vehicles, owing to the rapid technological advancements, will create a demand for a higher bandwidth. Thus, the escalating need for sensors, interfaces, and controllers will drive the demand for automotive ethernet solutions in the future.

At present, players operating in the automotive ethernet market are improving their existing products and making hefty investments for the development of novel technologies, to gain a competitive edge. For instance, in January 2020, NXP Semiconductors N.V. introduced NXP SJA1110, a multi-gigabit ethernet switch, to help automakers in delivering high-speed networks for connected vehicles, with built-in safety features. This switch offers integrated 100BASE-T1 PHYs, multi-gigabit interfaces, and hardware-assisted security.

The component segment of the automotive ethernet market is categorized into services, hardware, and software. Under this segment, the services category is expected to register the fastest growth throughout the forecast period due to the challenges faced during the integration of ethernet in automobiles. The services category is further classified into training and support, implementation, and consulting. To simplify the complexities arising during the deployment of ethernet, automotive original equipment manufacturers (OEMs) are availing of consulting services.

Globally, the Asia-Pacific (APAC) automotive ethernet market is expected to display the fastest growth during the forecast period due to the rising technological developments, surging number of favorable regulations, and prospering economy of regional countries. Besides, the surging number of automobile manufacturing units in APAC will facilitate the market growth. Moreover, the burgeoning demand for automobiles in India and China, owing to the growing population and its mounting disposable income, will augment the demand for automotive ethernet solutions in the region in the forecast years.

Thus, the booming demand for ADAS and connected features will fuel the market growth in the years to come.