- Study: Semiconductor groups most profitable car suppliers
Among the world's largest automotive suppliers, Bosch, ZF, and other German corporations occupy top spots. However, according to a ranking by consulting firm Berylls of the most profitable suppliers by revenue in the previous year, three semiconductor companies lead by a significant margin: Japan's Renesas, Swiss conglomerate ST Microelectronics, and Munich-based chipmaker Infineon, with operating profit margins of well over 25 percent of revenue.
This is attributed to the excess demand due to the increasing importance of software, the industry experts wrote. "However, the outlook for 2024 does not look quite as rosy": The chipmakers have expanded their production capacities and now face a sluggish automotive market; demand for semiconductors and processors has plummeted. "Significantly lower, but still above-average margins are expected for 2024 and 2025."
Asian companies particularly profitable
Half of the 25 most profitable suppliers are Asian companies, according to Berylls. "It's not necessarily high-tech that helps them achieve large profits. Especially Chinese suppliers convince with traditional products like tires (Sailun), glass (Fuyao), and parts for the internal combustion engine (Weichai Power)." Only two German companies are among the top 25: Infineon and Munich-based brake manufacturer Knorr-Bremse.
A quarter of the most profitable suppliers are tire manufacturers: Hankook, Toyo, Sailun, Pirelli, Bridgestone, and Michelin sell their products not only to automakers but also directly to end customers. "They have a trump card in the B-2-C business that other suppliers do not have."
Despite their success in the semiconductor sector, the outlook for companies like Infineon in the automotive market for 2024 is less optimistic due to a slowing demand. The Manufacture of motor vehicles is a significant market for semiconductor companies, and Infineon remains one of the few profitable suppliers in this sector, even with anticipated lower margins for the coming years.
