This article is synthesized by Semiconductor Industry Vertical and Horizontal (ID: ICVIEWS)
Demand growth for automotive chips is expected to be highest at the 20nm to 45nm node.
The semiconductor shortage plaguing the auto industry could persist in some form until 2026, predicts Boston Consulting Group. At present, the manufacturing and logistics challenges caused by the epidemic are easing; consumer chip demand has reached a saturation point and is showing a cyclical decline. However, with the proliferation of semiconductor-intensive automotive applications, such as advanced driver assistance systems (ADAS) and electrification, continued growth in automotive semiconductor demand is inevitable.
Even if car production remains steady, the adoption of electric vehicles (EV) and advanced driver assistance systems (ADAS) will substantially increase the semiconductor content in vehicles. Due to the need for discrete power and analog chips, battery electric vehicles (BEVs), with twice the semiconductor content of internal combustion engine vehicles (ICEs), are expected to hold the highest market share among EVs by 2026.
Automotive demand growth will be highest for logic chips fabricated at the 20nm to 45nm node to meet the growing computing demands of centralized electrical/electronic architectures, which we expect will ease demand pressure at mature node sizes greater than 55nm.
The increasing sophistication of vehicles means that despite recent capacity investments, the imbalance between chip supply and demand will persist for at least the next four years. However, the nature of the chip shortage and the types of devices affected will change over time, requiring automakers to actively manage risk as the situation evolves. The automotive semiconductor market is expected to grow at more than 9% annually through 2030.
The automotive semiconductor market still faces three major challenges:
First, to meet the needs of centralized electrical and electronic architectures and ADAS, automotive semiconductor needs need to move from mature nodes above 45nm to more advanced nodes and wide bandgap components. Managing this transition effectively is the difference between delivering compelling new features and products and becoming an industry laggard.
Second, the tight supply of analog and MEMS chips is likely to persist, in part because new fabs have higher cost losses than fully depreciated fabs, which discourages new investment.
Third, 50% of the future manufacturing capacity is planned to be in mainland China.
To manage risk and secure supply, the automotive industry must take the following steps: Remain focused on building a resilient supply chain; Align semiconductor strategy with product strategy; Support critical supply needs by establishing itself in the semiconductor value chain , shaping the future; automotive executives must recognize that semiconductor supply challenges are constantly evolving.
Automotive chips become the only bright spot
Chip sales have declined across many customer segments, but are still enjoying one area of increased demand: automotive.
Rising sales of electric vehicles -- which tend to use more semiconductors than gasoline-powered cars -- combined with greater automation in all vehicles have kept car chip makers busy. Tesla CEO Elon Musk said last week that the long-term outlook for the market appeared to be strong, detailing his car company's plan to expand annual vehicle production to 20 million vehicles by 2030 from about 1.3 million in 2022 car.
"We are consuming about 700,000 12-inch wafer equivalents," Karn Budhiraj, Tesla's vice president of supply chain, said Wednesday, referring to the material used to make individual chips. "We will need 8 million wafers," he added, once the company hits its production target of 20 million vehicles. Tesla also said it was looking at ways to reduce the number of chips used per vehicle and, given the way the industry is expanding, doesn't expect chip manufacturing capacity to be a hindrance.
Chip executives say the growth in the number of chips used in cars is staggering. As of 2021, the average car has about 1,200 chips, double the number in 2010, and that number is likely to rise, executives said. Including Dutch automotive chip company NXP, German chip company Infineon, Japanese company Renesas and American companies TI and ADI are important players in this market.
Auto-related revenue should grow more than 30% in the current quarter, even as the company's overall revenue is expected to shrink, Matthew Murphy, chief executive of Marvell of the United States, said on Thursday. The company's auto-related chip sales could hit $500 million in the next few years, up from about $100 million now, he said.
NXP's automotive chip sales rose 25 percent last year, and the company said it expects growth of about 15 percent in the first quarter of this year. Renesas' automotive business grew nearly 40 percent last year, and analysts expect more growth this quarter. Nearly a quarter of Analog Devices' sales come from the automotive industry, which grew 29 percent last year.
It’s not just the cars themselves that are getting more chip-intensive; semiconductor executives say so is auto production as manufacturers adopt greater automation to cope with labor shortages and try to keep costs down.
The boom in auto chips contrasts sharply with a sharp decline in other industries for chipmakers whose products have moved into electronics closely tied to consumer interest.
END
Welcome to join Imagination GPU and artificial intelligence communication group 2
Join the group, please add the editor WeChat: eetrend89
(Please add company name and title)
recommended reading
Dialogue with the Chairman of Imagination China: Using GPU as the fulcrum to strengthen software and hardware collaboration to facilitate digital transformation
Imagination launches first edge AI course
Imagination Technologies is a UK-based company dedicated to the research and development of chips and software intellectual property (IP). Products based on Imagination IP are used in the phones, cars, homes and workplaces of billions of people around the world. For more information on cutting-edge technologies such as the Internet of Things, smart wearables, communications, automotive electronics, and graphics and image development, welcome to Imagination Tech!