These days, we often read catchy lines such as "cars had less than 50 ICs a decade ago, while today they have hundreds." And that the number of electronic subsystems in autos has grown from three in the 1970s to 20 or more today.

A relatively mature auto industry is looking to electronics applications for a kind of renaissance, and the buzzword is "infotainment"—promising TV-DVD-GPS-enabled multimedia cars with Internet command-and-control services.

Beyond the multimedia glitz, however, powertrain and safety systems continue to grow, as they create new demand for sensors by reducing fuel consumption and exhaust emissions, while making vehicles safer. Image sensors, for instance, are enabling new safety features such as night vision, lane departure warning systems, blind-spot detection, collision mitigation and pedestrian detection.

As they say, the proof is in the pudding. When the market is big enough, everybody senses the opportunity.

The EDA industry now sees automotive as a bright spot. Here, firms like Mentor Graphics are extending their automotive offerings to a comprehensive set of electrical and electronic design solutions. Mentor is currently a major player in cabling and wire harness design tools for the automotive industry.

Seeing automotive as a growing space, two leading suppliers of ICs to the automotive sector—Freescale Semiconductor and STMicroelectronics—have formed a design alliance for automotive electronics based on the PowerPC processor architecture. The efforts seem focused on making PowerPC an auto industry standard in the same way ARM became the dominant processor architecture in mobile phones in the 1990s.

And ARM is not sitting on its laurels either—it has vowed to fight it out for a greater market share. With PowerPC already well-entrenched in the powertrain, ARM is focusing more on the infotainment side of auto electronics.

NEC Electronics, another leading player in the auto sector, is revamping its automotive strategy by bolstering its MCU business. According to IC Insights, the automotive chip market was worth $11.5 billion in 2004 and is projected to surpass $18 billion by 2008.

But beyond the numbers crunch, what is it that is so exciting about automotive electronic design? Many industry observers reckon that auto electronics will match the PC market's potential to become the new growth driver for IC and system revenues.

It's not that Asia is waking up to the "next big wave" just now. System and IC design houses in Korea have been enjoying proximity with two fast-growing automakers—Hyundai and KIA—both heavy users of automotive design solutions.

In Taiwan, IT players in the communications, consumer and computing sectors, wary of steadily thinning profit margins, spotted the opportunity several years ago.

For starters, IT specialists are producing relatively simple aftermarket multimedia systems for automobiles. To accelerate their move into auto electronics, however, many are entering into strategic partnerships with automakers and parts suppliers. For instance, BenQ has teamed up with Volkswagen to jointly develop automotive multimedia systems.

But a far bigger opportunity is undoubtedly in mainland China, where all major automakers are camping in search of a new growth engine. On top of China's growing reputation as the new "boom town" is the fact that automotive electronics has principally been a system design business, and China's design landscape has been evolving mostly around system design.

Growing electronic content in cars is apparently good news for the IC and system design industries. One good thing going for automotive electronics is that, unlike telecom, which is subject to a lot of ups and downs, the auto market is generally stable.

But the automotive electronics ride—adding the fourth C for cars to the existing 3C moniker—won't come without some serious hitches. The auto industry at large is more conservative and slow-moving than the IT industry, and it has longer design cycles, while product support needs stretching to a decade or more. The auto industry's stringent specifications and resource support would be another tough nut to crack.

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