5G, 5G RedCap to Dominate Automotive Connectivity by 2030

• By the end of this decade, more than half of the vehicles shipped will embed 5G capability, driven by centralized architectures, digital cockpits and autonomous capabilities (ADAS L3+).
• Qualcomm will remain the leader in automotive connectivity, capturing about half of the market by the end of this decade, while MediaTek will gain share in the near-term with its early mover advantage in automotive 5G RedCap chipsets.

The global automotive connectivity module and chipset market is projected to grow at a 13% CAGR between 2020 and 2030, with NAD module shipments set to exceed 700 million through the decade, according to the latest research from Counterpoint’s Global Automotive NAD Module and Chipset Forecast.

Commenting on the projected growth in connected vehicles, Research Analyst Subhadip Roy said, “We are now entering the Automotive 2.0 era, characterized by significant transformation across drivetrain (electrification), safety and mobility (autonomy), cockpit and infotainment (digital), all powered by a single thread of advanced connectivity enabling Software Defined Vehicles (SDV). Advanced 5G connectivity will catalyse this transformation with higher bandwidth, capacity and lower latency, enabling features such as real-time Battery Management Systems (BMS), the whole gamut of location-based services integrated with HD/AD maps and streaming infotainment. It will also enable low-latency C-V2X and data, sensor-assisted autonomous driving.

Roy added, “Currently, 4G Cat 4 access technology dominates the NAD module market, meeting the speed requirements of OEM telematic applications. However, with the growing need for next-generation SDVs, 5G will become the dominant technology for L3+ ADAS/ADS cars while 5G RedCap will replace 4G Cat 4 for L2 ADAS and below connected vehicles, mainly focusing on OEM telematics and light streaming infotainment.”

Commenting on the regional dynamics shaping the adoption of SDVs, Senior Analyst Parv Sharma said, “China has been at the forefront of the SDV era starting with electrification and digital cockpit as well as enabling autonomy features in most new vehicles. This adoption and scale have not only benefited China but the entire automotive value chain. For example, China contributed to nearly one-third of the total NAD module shipments in 2023 and eight out of every 10 vehicles shipped in the country were connected, which is estimated to reach 100% penetration in passenger cars by 2028. China also leads in terms of 5G adoption. 20% of the total NAD modules shipped within the country in Q1 2024 were 5G capable. Comparatively, outside of China, the penetration of cellular-connected NAD modules was close to 66% in 2023 and is expected to grow in the coming years.”

Commenting on key vendor dynamics, Sharma added, “Qualcomm leads the automotive connectivity chipset market and will maintain its leadership through 2030 with good traction within China as well as outside. MediaTek has expanded its share to rank second, despite a wide margin with Qualcomm. The company is expected to gain share helped by its growing pipeline with Dimensity Auto and 5G RedCap for automotive solutions. The share of Chinese chipset vendors HiSilicon, UNISOC, ZTE, ASR and others, is steadily growing due to local partnerships with NAD module and TCU vendors along with growth in emerging markets. Competition among the NAD module vendors is also shaping up nicely despite consolidation of the market over the years. Quectel, Rolling Wireless (along with Fibocom-Favalon) and LG continue to command the lion’s share of the NAD module market. Continental, Harman, WNC, AM Telecom and others will continue to grow steadily through specific partnerships and customer relationships in targeted geographies.”