As the electronics, standardization, and networking levels of the automotive industry continue to improve, automotive electronic chips have become one of the main engines driving the development of the automotive industry. This article will take an in-depth look at the current status of the automotive electronics chip industry and its expected development trends in 2023.
Ⅰ. Current status of the automotive electronic chip market
1. Market demand increases significantly
As the level of electronics in the automotive industry increases, the demand for automotive electronic chips is growing rapidly. From basic power system control to advanced driver assistance systems (ADAS), driverless technology and car entertainment systems, they all rely heavily on electronic chips. It is expected that the automotive electronic chip market will reach tens of billions of dollars by 2023.
2. Prominent supply chain problems
However, supply chain problems have begun to arise. Since 2023, the global chip supply crisis has been plaguing the automotive industry. Many automakers have been forced to suspend production due to a mismatch between supply and demand due to insufficient production capacity and slow production processes. Although relevant departments are still increasing investment in production and looking for alternatives, it is still difficult to quickly solve this problem.
Ⅱ. Future development trends of automotive electronic chips
1. Highly integrated and low power consumption
As vehicle electronic systems become more and more complex, automotive electronic chips are often highly integrated and low-power. On the one hand, this will significantly reduce the price and quantity of automotive electronic systems and improve the overall performance of the car. The development of the semiconductor industry will be significantly affected. On the other hand, it will also set higher standards for chip process technology.
2. Intelligence and networking
Another trend in the development of automotive electronic chips is intelligence and networking. Thanks to 5G and AI technology, automotive electronic processors will have more powerful data processing capabilities and complex algorithms, which will strengthen support for autonomous driving and Internet of Vehicles.
3. Market competition intensifies
With the advancement of automotive electronic chip technology and the increase in consumer demand, market competition will only become more intense in the future. On the one hand, traditional automotive electronic chip manufacturers must maintain competitive advantages through technological innovation and production capacity improvement; on the other hand, they must maintain competitive advantages. New market participants such as technology giants and start-ups are constantly pouring in, using their own technological advantages and innovation capabilities to expand market share.
4. Strengthening of independent research and development capabilities
Today, the main competitiveness of the automotive industry is gradually shifting to the independent research and development capabilities of automotive electronics, especially chips. With the development of autonomous driving, electrification, and connectivity, the automotive industry’s demand for personalized and high-end chips continues to increase, which also forces the automotive industry to strengthen its research and development capabilities. In order to ensure control of important technologies, quite a few car manufacturers have begun to form their own chip teams or work closely with chip manufacturers.
5. Enhancement of security requirements
As cars become more complex and electronic, the security of automotive electronic chips is a growing concern. Whether it is a matter of data protection or system stability, security is an important component that must be considered. Therefore, a key issue in the future development of automotive electronic chips will be how to improve chip performance while maintaining its security.
The automotive electronic chip market will show rapid growth in 2023. Whether it is the surge in demand or the rapid development of technology, this market has huge potential. However, it must also deal with supply chain and market competition concerns. Automotive and semiconductor manufacturers must figure out how to adapt to market changes and upgrade their technology and production capabilities to keep up with future trends.
Looking back at the past, the development history of automotive electronic chips is a history of technological progress and market transformation. Future advancements will continue to be influenced by market competition and technological growth. Whether it is the development of high integration and low power consumption, or solving the problems of intelligence and networking, chip and automobile manufacturers must work together. Only in this way can the automotive electronic chip industry have the vibrant and promising future we desire.
Automotive chips are small electronic components inside cars that are responsible for processing and regulating many vehicle operations. Automotive chips can be divided into several categories according to their uses and functions, including control unit chips (ECU), sensor chips, communication chips and processor chips. Air conditioning, brakes, and engine systems are all controlled by control unit chips. Sensor chips, including cameras, radar and lidar, collect information about the vehicle and its surroundings. Communication chips facilitate internal and external communications, including between vehicles and infrastructure. Complex driver assistance and autonomous driving systems run on processor chips.
From the perspective of the global automotive chip industry market size, research shows that the global automotive chip industry market size will be approximately US$48.04 billion in 2022, an increase of 5.4% from the previous year, with a compound growth rate of 6.89% from 2014 to 2022. Global automotive chips benefit from the trend of automotive electrification and intelligence. Driven by the trend of vehicle electrification and intelligence, the market is expanding rapidly. From a geographical distribution perspective, most automotive chips are distributed in industrialized countries and regions. About 25.1% of the global automotive chip market is in Europe, followed by China (22.7%), the United States (20.5%) and Japan (10.4%).
In terms of the scale of the domestic automotive chip industry, my country’s automotive chip market has a considerable market. Currently, imports are the main source of high-end goods. Data shows that China’s automotive chip market will be approximately 79.46 billion yuan in 2022, an increase of 7.5% over the previous year. Among them, computing and control chips account for 26.2%, power semiconductors account for 23.5%, sensor chips account for 12.4%, and the remaining 37.9% are other automotive chips.
From the perspective of global market competition, the overall concentration of the automotive chip industry is low. Currently, the world’s top five automotive chip manufacturers control about 50% of the market share, which is mainly occupied by foreign chip manufacturers. Among them, Infineon accounts for the largest proportion. After Infineon acquired Cypress, it ranked first with a market share of 13.2%. NXP, Renesas, Texas Instruments and STMicroelectronics followed, with market shares of 10.9%, 8.5%, 8.3% and 7.5% respectively.
The localization rate of my country’s automotive chips is very low in terms of the domestic market. According to data, by 2022, the localization rate of automotive chips will be only 5.4%. However, our country has a considerable number of automotive chip companies. Many domestic automotive chip manufacturers are increasing their research and development efforts to accelerate the growth of the domestic automotive chip industry from the perspective of a complete chip industry supply chain.
At present, foreign companies occupy a considerable market share in the MCU chip industry, but the research of domestic companies still needs to be developed and promoted. Some companies with strong R&D capabilities have formed significant technological advantages in professional fields and occupied a dominant position in the market. It is predicted that the localization process of the automotive chip industry will accelerate in the future.
In the future, the automotive chip industry will continue to develop in three directions: autonomous driving technology, vehicle interconnection and data security, as well as energy efficiency and environmental protection.
2. Data security and vehicle interconnection. The growth of automotive connectivity and intelligent transportation systems will encourage further innovation in automotive chip communications and data processing. To provide real-time traffic information, remote control and software upgrades, these chips will allow vehicles to connect in real time with infrastructure, other vehicles and cloud platforms. To ensure vehicle data and communications are secure, future chips will need to incorporate stronger encryption and authentication technologies. Therefore, data security will become a crucial issue.
3.Environmental protection and energy efficiency. To reduce energy use and emissions, the next generation of automotive chips will focus on energy efficiency. This involves the efficient use of renewable energy, complex control of electric vehicle powertrains, and improved battery management. In order to create a smarter and more efficient urban transportation system, chips will also be more frequently used in aspects such as traffic optimization and vehicle environment perception.
“Our products want to be better applied in cars and solve the problem of cost-effectiveness.”
Yuan Chengyin, Secretary-General of the China Automotive Chip Industry Innovation Alliance, said this at the 2023 World Intelligent Connected Vehicle Conference on September 22.
Yuan Chengyin said that this year, the supply demand of automotive chips from OEMs has dropped significantly. Since there will be many non-market factors that will affect the industry, our current focus is to do a good job in backing up the basic equipment level, doing a good job in risk management and supply chain control, and supporting the sustainable development of the industry, because there will be many non-market factors. factors that may have an impact on the industry.