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It is obvious to the human perception that an automobile on the road today has simply transformed from being a mere mechanically operated assembly of components to an electro-mechanically operated device. A strong contributing factor to this transformation is the use and development of semiconductors in the automotive industry in the past few years.
Many big giants, such as Samsung, NVIDIA, Sony, Panasonic, etc are making substantially large investments into the semiconductors field as they foresee the exponential rise in demand for semiconductors in the future. With the vehicles seeming to become more and more complex and loaded with features, the need and demand for semiconductors is only going to see an upward rise.
To know more about Global Electric Vehicle Semiconductors Market, read our report
The automotive semiconductor market can be segmented based on several factors which analyse and define the type and work the semiconductor chips and components offer under the category. The market segmentation for this industry is given as follows:
In Jan 2021, the shortage of semiconductors has forced major auto companies to halt or slow vehicle production. GM, VW, Ford, Fiat Chrysler and other major automakers have been hit and this has also resulted in delayed production of few models.
If the chip shortage lasts, production cuts could reduce the inventory of cars, trucks and SUVs for sale in the U.S. and other markets. Most of the semiconductor companies have switched and concentrated more on consumer electronics segment during Q2 in 2020 due to pandemic’s affect on global auto sales. It takes 6 to 9 months of lead time for the industry to get chips through a series of suppliers.
This has resulted in automakers concentrating on high-margin vehicles and have been trying their best to avoid slow-down in production in this segment, by holding back the slow-selling vehicles. Despite this, US’ number one model Ford F-150 has witnessed a production cut back.
The automotive industry is seeing improvements by leaps and bounds in areas such as electromobility, automated driving, connectivity, etc each of which require semiconductors as their backbone.
Automated driving promises greater level of safety for the vehicles and many vehicles have already employed some levels of safety by means of Advanced driver assistance systems or ADAS which enable safety features such as Collision warning and Automatic Emergency braking.
Similarly, connectivity features such as wireless internet and navigation systems are already enabled on most vehicles. In terms of electrification of the drive train, many automakers are already looking at complete electrification or on the lines of partial electrification by means of hybrid drive trains.
It is fascinating to note that the basis of all such advancements in the automotive sector are electronic devices such as semiconductors.
The growing technical innovations across the automotive industry is set to increase sales in the semiconductor industry. The industry is witnessing improvements in the 3D mapping applications mostly for electric vehicles, EV battery packs and BMS as well as augmented reality technologies like head-up displays in the infotainment units.
The demand and development for ADAS systems, connected car technology have triggered a transformation in the infotainment units from bulky to sleek and upgraded for which they make use of technologically latest semiconductor chips and electronic components.
One interesting aspect of the semiconductors that are being used in the automotive domain is that it requires a very high level of precision and quality. According to a chip manufacturer, the average time to manufacture a semiconductor chip to get accepted by an automotive OEM is around 6 months.
In fact, during this time the manufacturer ensures that the semiconductor is already of a superior quality by subjecting it to high voltage and high temperature tests.
Besides this long duration and extremely stringent quality controls, the automotive OEMs tend to perform their own individual tests at a system level to ensure smooth functionality in the vehicle. This gives rise to an exceptionally high amount of time and process for a semiconductor company to get their product accepted for use in a vehicle.
Consequentially, automotive OEMs rarely tend to switch between semiconductor companies and their products. This gives rise to a high level of trust and loyalty between semiconductor companies and automotive OEMs.
Currently, there has been huge demand for old robust tools so as to meet the semiconductor requirement. Toolmakers such as Applied Materials Inc and Lam Research Corp have been refurbishing their 1990s tool models after a unprecedented demand from the auto industry.
Minnesota based Polar semiconductors have been booked beyond capacity. Although, Polar produce old 200-mm silicon semiconductor chips, there has been demand for these wafer products too along with new chips.
The global automotive semiconductor market is estimated at $XX Billion in 2024 growing at –% CAGR till 2030.
The current semiconductor crunch situation has led to hike in used equipment prices at least by 20%. Also, number of refurbished tools in inventories has hit all time low in majority of the companies.
Before the pandemic, the chip industry was projected to grow 5% over a five-year horizon and now it is estimated to grow at twice that rate.
Stellantis N.V. and Hon Hai Technology Group signed a non-binding memorandum of understanding today to form a relationship with the goal of designing a family of purpose-built semiconductors for Stellantis and third-party clients. Allows Stellantis’ revolutionary STLA Brain design to take use of cutting-edge semiconductor technologies.
Stellantis vehicle adoption and integration. Stellantis’ global semiconductor supply chain will be more stable thanks to this alliance. With Foxconn, they want to develop four new chip families that will cover more than 80% of our semiconductor requirements, allowing us to upgrade our components, reduce complexity, and streamline our supply chain.
This collaboration was launched during Stellantis Software Day, during which the company unveiled STLA Brain, a novel electrical/electronic and software architecture that will be available in the near future.
Semiconductors are turning out to be a vital part of the automotive future. It is gaining exceptional demand especially in areas related to automated driving, connected driving and electrification of drive trains.
Many big players are continuously investing largely into the advancement of semiconductor technology. Although lots of progress is happening in this field, a lot about the compatibility and usability of these semiconductors for various automotive OEMs remain a good unanswered question.
An in-depth study of the technology and the improvements required in the semiconductor technology can give valuable insights into the future of the semiconductor technology. At last, but not the least, it is obvious that semiconductors are the future of the automotive development and significant amount of developments are soon awaited!