By Kate Yuan
(JW Insights) Oct 13 -- As Chinese automakers intensify its efforts in electrification and intelligentization of automobiles, local chipmakers have worked with them to promote domestic substitution, according to a JW Insight report.
The electric and intelligent vehicles have driven the rapid growth of various semiconductor chips for control, storage, power, communication, and sensor. The chip demand for an EV is about twice that of a traditional fuel vehicle.
From 2022 to 2029, the compound annual growth rate (CAGR) of traditional automotive components is only 2%, while the CAGR of new energy vehicles (NEVs) is 16%. Meanwhile, automotive intelligence requires higher computing power, needing more chips per vehicle. The global automotive semiconductor market is expected to grow at a CAGR of 11% from 2022 to 2029.
China’s chipmakers have benefited from the rapid growth of the automotive semiconductor market. Domestic automakers are actively exploring the use of domestic chips whether for supply chain security or other considerations.
An automaker insider said that they made considerable efforts and used many domestically-produced chips in 2020. However, these chips accounted for only 5% of the total amount. Moreover, less-difficult-to-make chips, such as power devices, communication devices, and linear power supplies, took up about 60%.
The chip shortage in 2022 has also accelerated the process of domestic substitution. However, it not only involves a lengthy replacement process but also poses a significant challenge to the safety and reliability of chips in core components.
“Compared to major overseas companies, domestic MCU suppliers have shorter verification time for automotive standards, and some products cannot be used in high-intensity and harsh environments for a long time,” according to an industry insider.
Industry experts pointed out that there are still several urgent issues that need to be addressed in the collaboration between the chip companies and automakers. Among them is the structural imbalances in chip design, and insufficient manufacturing capabilities. For chip design companies, more prefer to develop popular categories like control and self-driving chips, while specialized fields are neglected, such as audio and driver chips. Mature and easy-to-develop chips are preferred, while areas with high development difficulty and risks receive less attention.
Furthermore, advanced processes are still in a blank state, and high-end MCUs, AI chips, 5G chips, and tape-out heavily rely on foreign sources.
Industry experts call for promoting all seven major categories of automotive chips. The high-precision and challenging automotive chips will be a key direction for their deep involvement in the automotive industry in the future.
