Automotive semiconductors: the engine of industry change under the wave of smart electric vehicles
The wave of smart electrification is in full swing
At a time when science and technology are developing rapidly, the wave of smart electrification is sweeping the entire automotive industry with an unprecedented momentum, completely rewriting the development trajectory of the automotive industry. This change not only reshapes the basic attributes of automobiles, but also profoundly affects people's travel methods and life experience.
With the continuous improvement of environmental awareness and the strict restrictions on carbon emissions by various countries, the market share of electric vehicles continues to rise. According to data from the International Energy Agency (IEA), global electric vehicle sales will exceed 10 million in 2023, an increase of nearly 30% over the previous year. In China, the world's largest automobile market, the penetration rate of new energy vehicles has exceeded 30% in 2024. The rise of electric vehicles has broken the market pattern dominated by traditional fuel vehicles for a long time and injected new vitality into the automotive industry. Many traditional automakers have increased their investment in the field of electric vehicles and launched a series of new energy models in an effort to seize the initiative in this transformation.
At the same time, the application of intelligent technology in the automotive field has also shown explosive growth. Autonomous driving technology has gradually moved from the initial concept to reality. Today, many cars have L2-level autonomous driving assistance functions, such as adaptive cruise control, lane keeping, and automatic parking. Even some high-end models are already testing and piloting L3 and above autonomous driving, drawing a beautiful blueprint for "unmanned driving" for future travel. The development of Internet of Vehicles technology has also made cars no longer isolated individuals, but mobile smart terminals. Through the connection with the Internet, cars can achieve real-time navigation, remote control, vehicle health monitoring and other functions, bringing users a more convenient and efficient travel experience. The emergence of smart cockpits has turned the interior space of the car into a multi-functional place integrating entertainment, office, and social interaction, where people can enjoy the convenience and fun brought by intelligence in the car.
In this wave of intelligent electrification, automotive semiconductors, as the support of core technologies, play a pivotal role. It is like the "brain" and "nervous system" of the car, which not only provides guarantees for the efficient power output and precise battery management of electric vehicles, but also is the key to realizing advanced functions such as autonomous driving and smart cockpits. It is no exaggeration to say that without the rapid development of automotive semiconductors, there would be no smart electric vehicles today. Next, let's take a deep look at how automotive semiconductors play a key role in this transformation and how it will continue to empower the future development of the automotive industry.
Analysis of the current situation of automotive semiconductors
Market size and growth trend
The automotive semiconductor market has shown a booming trend in recent years and has become a highly watched segment in the semiconductor industry. According to data from market research firm TechInsights, the global automotive semiconductor market size reached US$69.2 billion in 2023, an increase of 16.5% from 2022, setting a new record. This growth is mainly due to the rapid popularization of electric vehicles and smart connected vehicles, as well as the continuous development of advanced driver assistance systems (ADAS) and autonomous driving technologies.
In the past few years, the automotive semiconductor market has maintained a high growth rate. In 2021, the automotive semiconductor market achieved strong growth, with a growth rate of 26%, due to the dual effects of the recovery of the automobile market after the epidemic and the shortage of semiconductors. In 2022, although the overall growth of the global semiconductor market slowed down, only increasing by 3.3%, the automotive semiconductor market still performed well, with a growth rate of 17%. Entering 2024, although the growth rate of the automotive semiconductor market has slowed down, the industry outlook remains optimistic. According to IDC, the growth rate of the automotive semiconductor market will remain between 5% and 7% in the next three years. By 2027, the global automotive semiconductor market is expected to exceed US$88 billion.
Although the current growth of the automotive semiconductor market has slowed down, there are some deep-seated reasons behind it. On the one hand, the growth of global automobile production has gradually stabilized. According to the International Organization of Motor Vehicle Manufacturers (OICA), global automobile production in 2023 will be 93.5 million vehicles, an increase of 10% from 2022. This is the strongest production growth since the recovery from the 2008-2009 Great Recession in 2010, but it is still lower than the historical high of 97.3 million vehicles in 2017. S&P Global Mobility predicted in April 2024 that the growth rate of light vehicle production in the next three years will be between 0% and 2%, which means that the growth of the automotive semiconductor market will no longer rely mainly on the increase in vehicle production. On the other hand, although the development of electric vehicles and autonomous driving technology has brought huge opportunities to the automotive semiconductor market, the development of these technologies is currently facing some challenges, such as the slowdown in the growth of electric vehicles and the delay in the deployment of autonomous vehicles, which have affected the growth rate of the automotive semiconductor market to a certain extent.
The core role of automotive semiconductors
The key role in electrification
In the process of automotive electrification, semiconductors play an extremely critical role. They penetrate into the core systems of electric vehicles and become the cornerstone for efficient power conversion and precise battery management.
The battery management system (BMS) is a key component of electric vehicles, and its performance directly affects the safety, service life and range of the battery. Semiconductors play a core role in BMS, monitoring the voltage, current, temperature and other parameters of the battery in real time through high-precision sensors and microcontrollers. These semiconductor devices can quickly and accurately collect data, and perform precise analysis and processing, adjust the charging and discharging strategy according to the real-time status of the battery, and ensure that the battery always operates in a safe and efficient state. For example, Infineon's TLE9012BQU is a chip specifically used for battery management. It has high-precision voltage and current measurement functions, which can achieve balanced management of battery packs, effectively extend battery life, and improve battery efficiency. In actual applications, the battery packs of electric vehicles equipped with this chip have a lifespan that is about 20% longer than those without this chip, and the driving range has also been significantly improved.
The power conversion system is also an important part of electric vehicles. It is responsible for converting the DC power stored in the battery into the AC power required to drive the motor, and realizing the conversion between different voltage levels. In this process, wide bandgap semiconductor devices such as silicon carbide (SiC) and gallium nitride (GaN) show advantages that traditional silicon-based devices cannot match. SiC devices have the characteristics of high withstand voltage, low on-resistance, and high switching frequency, which can effectively reduce energy loss in the power conversion process and improve conversion efficiency. Taking Tesla Model 3 as an example, its inverter uses SiC MOSFET devices, which improves the energy conversion efficiency by about 5% compared with traditional silicon-based IGBT inverters, thereby further improving the vehicle's range. At the same time, SiC devices can also withstand higher temperatures, reduce dependence on cooling systems, and reduce system complexity and cost.
GaN devices perform well in high-frequency applications. They have higher electron mobility and switching speed, which can achieve more efficient power conversion. In on-board chargers (OBCs) and DC-DC converters, the application of GaN devices can significantly improve charging speed and power density. For example, Texas Instruments launched a 7.4kW electric vehicle bidirectional on-board charger reference design TIDM-02013 based on GaN technology, with a peak system efficiency of 96.5% and a power density of 3.8kW/L. The design uses a high-speed GaN switch (LMG3522-Q1) to achieve high-density and high-efficiency charging, greatly shortening the charging time and improving the user experience.
Powerful support for intelligence
With the rapid development of automobile intelligence, semiconductors have become a powerful support for realizing advanced functions such as intelligent driving and intelligent cockpits, giving cars "smart brains" and "sensitive perception systems".
In the field of intelligent driving, the computing power and data processing capabilities of semiconductors are the key to realizing autonomous driving. Autonomous vehicles need to process massive amounts of data from multiple sensors such as cameras, radars, and lidars in real time to accurately perceive and make decisions about the surrounding environment. For example, NVIDIA's DRIVE Orin chip, with a computing power of up to 254Tops, can quickly process complex road conditions, achieve accurate planning of vehicle driving paths, and stable operation of autonomous driving functions. This chip is widely used in high-end models of many new energy vehicle brands such as Tesla and Xiaopeng, providing powerful computing power support for their autonomous driving functions. In actual driving scenarios, vehicles equipped with DRIVE Orin chips can realize advanced autonomous driving assistance functions such as automatic following, lane keeping, and automatic lane changing on highways, greatly improving driving safety and convenience.
In addition, Mobileye's EyeQ series chips are also an important force in the field of intelligent driving. The EyeQ series of chips focus on computer vision processing. Through advanced algorithms and hardware architecture, they can quickly analyze and identify images collected by the camera, and achieve accurate detection and tracking of targets such as road signs, vehicles, and pedestrians. Take EyeQ5 as an example. It has a computing power of 24Tops and can support L3 and above autonomous driving functions. Many automakers, such as BMW and Volkswagen, have adopted the EyeQ series of chips in their models to improve the intelligent driving level of vehicles.
In terms of smart cockpits, semiconductors also play an indispensable role. It provides rich functions and smooth user experience for smart cockpits, turning the interior space into a comfortable and convenient mobile living space. For example, Qualcomm's Snapdragon automotive cockpit platform integrates high-performance processors, graphics processors (GPUs) and artificial intelligence engines, and can support high-definition displays, multi-screen interaction, voice recognition, gesture control and other functions. With its powerful computing power and excellent graphics processing capabilities, the platform brings users an immersive entertainment experience and convenient interaction methods. In actual applications, in the smart cockpit equipped with the Snapdragon automotive cockpit platform, users can easily control various functions of the vehicle through voice commands, such as adjusting the temperature, playing music, querying navigation, etc., while enjoying entertainment functions such as high-definition video playback and 3D games, making the driving process more pleasant and comfortable.
Empowering the future development path of the industry
Technological innovation drives
Technological innovation is the core driving force for the future development of the automotive semiconductor empowerment industry, and it is reshaping the landscape of the automotive industry at an unprecedented speed. The deep integration of artificial intelligence (AI) and machine learning technology in the field of automotive semiconductors has opened up a new path for the intelligent development of automobiles. Through AI algorithms, automotive semiconductors can analyze and process massive amounts of sensor data in real time, thereby achieving a higher level of autonomous driving functions. For example, AI technology can help cars more accurately identify target objects such as road signs, pedestrians, and vehicles, make decisions in advance, and avoid traffic accidents. Machine learning algorithms can also automatically adjust the performance parameters of the vehicle according to the driver's driving habits and road conditions, providing a more personalized driving experience. NVIDIA's DRIVE Thor chip is scheduled to be mass-produced in 2025. It integrates AI computing power and can support L4 and above autonomous driving functions, laying a solid foundation for the development of future autonomous vehicles.
The research and development and application of new semiconductor materials are also an important direction of technological innovation. Wide bandgap semiconductor materials such as silicon carbide (SiC) and gallium nitride (GaN) are gradually emerging in the automotive field with their excellent performance advantages. SiC materials have the characteristics of high withstand voltage, low on-resistance, and high switching frequency, which can significantly improve the energy conversion efficiency and range of electric vehicles. At present, more and more automakers are beginning to adopt SiC power modules in their electric vehicles, such as Tesla and BYD. GaN materials perform well in high-frequency applications. Its high electron mobility and switching speed make it have a wide range of application prospects in on-board chargers, radars and other equipment. For example, a company's developed on-board charger based on GaN technology is smaller and more efficient than traditional silicon-based chargers, which can greatly shorten the charging time.
In addition, the development of advanced packaging technology has also provided strong support for the performance improvement of automotive semiconductors. Advanced technologies such as system-in-package (SiP) and 2.5D/3D packaging can integrate multiple chips in one package to achieve higher integration and performance. These technologies can not only reduce the signal transmission delay between chips and increase data processing speed, but also reduce power consumption and cost. For example, automotive chips using 2.5D packaging technology can achieve higher computing power in a limited space, providing stronger support for intelligent driving and intelligent cockpits.
Collaborative development of the industry
Under the wave of intelligent electrification, collaborative development of the industry is crucial for the future development of the automotive semiconductor empowerment industry. The close cooperation between OEMs and semiconductor manufacturers is becoming a key force in promoting innovation and development in the automotive industry. This cooperation model can integrate the advantages of both parties and achieve mutual benefit and win-win results.
The cooperation between General Motors and seven major semiconductor manufacturers such as Qualcomm, STMicroelectronics, and TSMC is a typical case. Faced with the dual challenges of semiconductor shortages and technological upgrades, General Motors actively joins hands with semiconductor manufacturers to jointly develop a new generation of chips. Through cooperation, General Motors hopes to reduce the number of chips on future cars by 95% and develop three new microcontroller series. This cooperation model can not only reduce the complexity of semiconductor supply, improve the quality and predictability of chips, but also make it easier for chip manufacturers to meet General Motors' chip needs. For semiconductor manufacturers, cooperation with OEMs can obtain long-term and stable customers and ensure market share. At the same time, the two parties can jointly carry out technology research and development in the process of cooperation, accelerate the implementation of new technologies, and enhance the competitiveness of the entire industry chain.
The cooperation between Ford Motor and GlobalFoundries is also of great significance. The two parties signed a strategic cooperation agreement to increase GlobalFoundries' chip supply to Ford and may jointly develop new chips designed specifically for Ford. This cooperation will not only help improve the chip production and supply capabilities of the domestic automotive industry in the United States, but also meet Ford's special needs for chips in the process of electrification and intelligent development. Through cooperation, Ford can obtain a stable supply of chips to ensure the smooth progress of its production plan; while GlobalFoundries can use Ford's market influence to further expand its business in the field of automotive semiconductors.
In addition to the cooperation between OEMs and semiconductor manufacturers, the coordinated development of the entire automotive industry chain is also indispensable. From upstream semiconductor material suppliers and equipment manufacturers to midstream semiconductor design, manufacturing, packaging and testing companies, and downstream automobile manufacturers and parts suppliers, all links need to work closely together. For example, semiconductor material suppliers need to continuously develop and provide high-quality materials to meet the needs of semiconductor manufacturers for advanced processes; equipment manufacturers need to provide advanced production equipment to support semiconductor manufacturers to achieve technological breakthroughs; automobile manufacturers and parts suppliers need to promptly feedback market demand and application scenarios to guide semiconductor companies to develop products that better meet market demand. Only through collaborative innovation and cooperation across the entire industry chain can the rapid development and application of automotive semiconductor technology be achieved, and the automotive industry can be driven towards intelligent electrification.
Challenges and coping strategies
Supply chain risks
The automotive semiconductor supply chain faces many unstable factors, and its fluctuations have a significant impact on the automotive industry. The outbreak of the COVID-19 pandemic has become an important trigger for supply chain fluctuations. The spread of the pandemic around the world has forced many semiconductor factories to shut down, and production progress has been severely hampered. At the same time, logistics and transportation also face huge challenges. Traffic control and reduced flights have significantly extended the transportation time of semiconductor products and sharply increased transportation costs. For example, the recurrence of the pandemic in Malaysia in 2021 caused the factories of many semiconductor companies such as Bosch, Infineon, ZF, and Intel to shut down, which directly led to a tight global automotive chip supply situation. Many automakers had to cut production, and even some models had long delivery delays.
Trade conflicts are also a key factor affecting the stability of the supply chain. Trade frictions between some countries and regions have restricted the import and export of semiconductor products, and the increase in tariffs has further increased the procurement costs of companies. For example, the trade war between China and the United States has had a profound impact on the semiconductor industry. Many US semiconductor companies have been hit in the Chinese market, and Chinese automakers are also facing higher costs and supply risks when purchasing US semiconductor products. In addition, the fluctuation of raw material prices has also brought uncertainty to the semiconductor supply chain. The prices of raw materials such as silicon and germanium required for semiconductor production are affected by market supply and demand, geopolitics and other factors, and often fluctuate greatly, which increases the difficulty of semiconductor companies in controlling production costs.
In order to ensure the stability of the automotive semiconductor supply chain, the industry has taken a series of positive and effective measures. First, many companies have begun to actively promote the diversified layout of the supply chain and reduce dependence on a single supplier. For example, some automakers are looking for multiple semiconductor suppliers around the world and establishing cooperative relationships with companies in different regions to reduce the risk of supply interruptions caused by problems with a certain supplier. Secondly, strengthening localized production is also one of the important measures. More and more semiconductor companies are setting up factories near automobile production sites to achieve localized supply, which can not only shorten the length of the supply chain and improve supply efficiency, but also reduce transportation costs and trade risks. For example, TSMC has factories in mainland China, the United States and other places to meet the chip needs of local automakers.
In addition, establishing safety stocks is also a common way to deal with supply chain risks. Enterprises can reasonably estimate market demand and reserve a certain number of semiconductor products in advance to cope with possible supply shortages. At the same time, it is also crucial to strengthen information sharing and collaboration with suppliers. Enterprises maintain close communication with suppliers, keep abreast of information such as production progress and inventory status, and jointly develop response strategies to improve the flexibility and responsiveness of the supply chain.
Technical Difficulties Overcoming
In the application of automotive semiconductors, high temperature and high pressure environment is a severe challenge, which places extremely high demands on the performance and reliability of semiconductors. In the engine compartment and other parts of the car, a high temperature and high pressure environment will be generated during the operation of the vehicle, with temperatures as high as 150 degrees Celsius or even higher, and pressure far exceeding the ordinary environment. Under such harsh conditions, the performance of semiconductor materials will change significantly, and the carrier mobility of ordinary semiconductor materials will decrease, resulting in a decrease in the transmission efficiency of electrons and holes, which in turn affects the performance of the device. The increase in the thermal expansion coefficient will cause greater structural stress inside the device, which may cause the device structure to deform, affecting its stability and reliability. The oxidation reaction of the material is accelerated, the corrosion problem is aggravated, and the service life of the device will also be shortened.
In order to cope with these technical difficulties, researchers and enterprises have carried out in-depth research and innovation in many aspects. In terms of material research and development, continuous exploration of new semiconductor materials has become the key. Wide bandgap semiconductor materials such as silicon carbide (SiC) and gallium nitride (GaN) have shown great potential. SiC materials have excellent thermal and chemical stability, high thermal conductivity, can effectively dissipate heat, and reduce the temperature of devices in high temperature environments; at the same time, its bandgap width is large, and it can still maintain good electrical properties under high temperature and high pressure, and the carrier mobility is less affected by temperature. GaN materials have characteristics such as high electron mobility and high breakdown electric field strength, and perform well in high-frequency and high-voltage applications, and can achieve efficient power conversion in high-temperature environments. Many semiconductor companies have increased their investment in the research and development of SiC and GaN materials, continuously optimized the performance and preparation process of materials, and promoted their widespread application in the field of automotive semiconductors.
A series of improvements and innovations have also been made in device design and manufacturing processes. The use of advanced heat dissipation design, such as optimizing the heat dissipation fin structure and using efficient heat dissipation materials, can effectively reduce the operating temperature of the device and reduce the impact of thermal stress on device performance. By improving packaging technology, the sealing and corrosion resistance of devices can be improved, and their reliability in harsh environments can be enhanced. For example, some companies have adopted airtight packaging technology to effectively prevent external moisture and corrosive gases from corroding devices. In terms of circuit design, the use of redundant design and fault detection and fault tolerance technology can improve the stability and reliability of semiconductor devices in high temperature and high pressure environments. Even if some circuits fail, the basic functions of the devices can be guaranteed to operate normally.
Future Outlook
Automotive semiconductors undoubtedly play a mainstay role in the wave of intelligent electrification. They are the key support for the efficient operation of electric vehicles and the core driving force for the leap of automotive intelligence. Judging from the current development trend, the future of automotive semiconductors is full of infinite possibilities and opportunities.
With the continuous advancement of technological innovation, automotive semiconductors will continue to break through performance bottlenecks and achieve higher computing power, lower power consumption and stronger reliability. The deep integration of artificial intelligence and machine learning technology will enable cars to perceive, make decisions and execute more intelligently, laying a solid foundation for the realization of fully autonomous driving. The widespread application of new semiconductor materials will further improve the energy efficiency and range of electric vehicles, making them more advantageous in market competition. The development of advanced packaging technology will provide strong guarantees for the miniaturization, integration and high performance of automotive semiconductors.
Industry collaborative development will also become an important trend in the future development of automotive semiconductors. The cooperation between OEMs and semiconductor manufacturers will be closer, and both parties will jointly invest in R&D resources to develop semiconductor products that better meet market demand. Upstream and downstream companies in the entire automotive industry chain will also strengthen collaboration to form a more efficient and collaborative industrial ecosystem. This kind of industry collaborative development can not only reduce costs and improve efficiency, but also accelerate the implementation of new technologies and promote the automotive industry to a higher level.
The development prospects of automotive semiconductors under the wave of intelligent electrification are bright. It will continue to empower the automotive industry and promote the development of automobiles in a more intelligent, green and safe direction. We have reason to believe that under the leadership of automotive semiconductors, future car travel will become more convenient, comfortable and beautiful. Let us look forward to the automotive semiconductor industry creating more glory in the future and bringing more surprises and changes to human travel and life.