5G to drive connected cars as telematics control unit sales break all records

NEW DELHI: Driven by the rising penetration of connected cars and the consumer preference for digital features, global telematics control unit (TCU) shipments grew 13 per cent (on-year) last year, according to a new report.

A TCU refers to the embedded system on board of a vehicle that wirelessly connects the vehicle to Cloud.

Currently, more than 90 per cent of connected cars are using 4G TCUs. However, 4G is reaching maturity, according to Counterpoint Research

"The industry has to shift to 5G for cloud computing. 5G will provide more than 30 times faster data speeds and promises to reduce latency by 10 times," said research analyst Mohit Sharma.

Global TCU shipments are expected to grow at a CAGR of 15 per cent during 2020-2025.

"In terms of value, the TCU market will grow more than twofold to reach $7 billion by 2025," said associate director Brady Wang.

Favourable government policies around the world also helped this market to grow.

The global ASP (average selling price) of TCUs increased slightly in 2021 due to the rising cost of 4G chipsets.

"We expect the supply situation to remain constrained through much of 2022," according to Counterpoint Research's 'Global Telematics Control Unit Tracker'.

LG's TCU shipments grew 19 per cent (on-year) in 2021.

Its close relationships with GM and Volkswagen in the Chinese and US markets are helping LG maintain its leadership position.

LG is leading across all major regions except Europe.

"LG leads the global TCU market, followed by Continental and Harman. These top three players account for nearly three-quarters of the market," said senior research analyst Soumen Mandal.