Major automobile manufacturers announce: self-developed smart driving chips

The global automotive industry is at a crossroads in providing advanced semiconductors for autonomous driving. There are two options. One is to purchase and equip high-performance system-on-chip (SoC) semiconductors from Nvidia, which has an almost monopoly on level 3 and higher autonomous driving semiconductors. The other is to internalize them or explore new technologies.

The Automotive Advanced SoC Research Center (ASRA), a semiconductor R&D organization composed of 14 Japanese companies including Toyota, Nissan, and Subaru, stated at a recent press conference that the goal is to ensure the safety of semiconductor small chip (packaging) technology by 2028 and According to sources in the global automotive industry, the company will use this technology to develop SoCs into mass-produced vehicles.

If the development is successful, the production of the SoC will be handled by Rapidus, a semiconductor foundry co-invested by Japanese companies.

ASRA is committed to developing and producing 1nm ultra-high-performance SoC for communication and vehicle control of Level 3 and higher autonomous driving. It is believed that the Japanese automakers organized the alliance to reduce their dependence on Nvidia.

Yamamoto Keiji, chairman of ASRA and senior researcher at Toyota, said: "The performance of the SoC determines the performance of the car equipped with the SoC, including autonomous driving." He emphasized that development work is centered on the finished vehicle. Japan’s Ministry of Economy, Trade and Industry announced on March 29 that it would provide a subsidy of 1 billion yen for the project.

As high-performance, low-power semiconductor design technology, AI semiconductor technology required for autonomous driving, and high-speed signal interface technology become the core of future automobile manufacturing, competition among automobile manufacturers for the localization of semiconductors is accelerating. The representative company of semiconductor internationalization in the automotive industry is Tesla. Tesla is strengthening its independent development and vertical integration of SoC.

Recently, Chinese electric vehicle company NIO also announced the development of semiconductors for high-performance sensor lidar control.

Hyundai Motor Group faces more complex challenges. Jang Hong-chang, a senior researcher at the Korea Automotive Research Institute, said: "Hyundai Motor is pursuing complex countermeasures by purchasing Nvidia products and internalizing semiconductors at the same time." The company is internalizing semiconductors to reduce its dependence on Nvidia.

Hyundai Mobis acquired Hyundai Autron's semiconductor business unit in 2020 to strengthen its semiconductor capabilities and has been expanding its semiconductor design and foundry investments. It has invested about $50 million in Canada-based Tenstorrent, led by semiconductor chip design legend Jim Keller, and continues to invest in BOS Semiconductor, led by former Samsung Electronics executive Park Jae-hong. BOS Semiconductor is a fabless startup that designs high-performance SoC system semiconductors for automotive applications. It also continues to collaborate with Samsung Electronics on high-performance semiconductors for infotainment.

An automaker insider said: "Hyundai is taking steps to internalize high-performance chips into its own supply chain management, but it will take time to properly function as a check and balance on Nvidia."

According to South Korea's ZD Net, Hyundai Motor plans to use 5nmr advanced technology to develop advanced driver assistance system (ADAS) chips to support the advancement of the SDV plan. Previously, in June 2023, Hyundai Motor established a semiconductor research laboratory and hired former Samsung executives to be responsible for the development of the automotive SoC series Exynos Auto.

SDV represents a future area of ​​innovation, controlling vehicles through software, affecting driving efficiency, convenience and safety. Hyundai Motor previously announced plans to introduce online software update technology on all models by 2025 and gradually transition to SDV.

Hyundai is reportedly working with selected design solution providers (DSPs), with the automaker expected to work with either Samsung or TSMC. It is worth noting that both Samsung and TSMC plan to mass-produce automotive semiconductors using processes below 4 nanometers starting in 2024, so it is not ruled out that Hyundai Motor may use more advanced processes for chip development.

Regarding these speculations, Hyundai Motor officials said that discussions on automotive semiconductor development are ongoing, but no decision has been made yet.

Industry insiders pointed out that in the past, Hyundai Motor's automotive semiconductors mainly relied on first-tier suppliers. However, it is now directly investing in independent research and development to ensure a stable supply of advanced chips. In particular, with the impact of semiconductor supply shortages on major automakers two or three years ago, the importance of semiconductor self-sufficiency has been emphasized.

In addition to internal development, Hyundai Motor is also actively integrating domestic automotive semiconductors. Starting in 2025, they will purchase Samsung's in-vehicle infotainment (IVI) chip Exynos Auto V920, invest in South Korean automotive semiconductor design startup BOS Semiconductors, and commission the development of high-performance NPU SoC for ADAS.

In early February this year, reports pointed out that Hyundai Motor has been actively contacting a number of domestic fabless companies since the beginning of this year to entrust the development of automotive chips. The move shows that the project, which is still in its conceptual stage, is making concrete progress.

Hyundai is believed to have chosen to partner with fabless companies to create an ecosystem that can be commercialized quickly, as developing chips on its own requires significant investment and time.

Hyundai is currently looking to partner with a South Korea-based fabless company with sales of about 100 billion won ($75.2 million) that has a history of supplying chips to automakers. It is planned to entrust the semiconductor design to fabless, and once it passes testing and verification of quality, domestic foundries specializing in semiconductor production will produce the semiconductors and supply them directly.

Hyundai Motor currently relies heavily on overseas automotive chips. Its main suppliers are European and Japanese companies such as Infineon Technologies, NXP Semiconductors, Renesas Electronics, and STMicroelectronics.

The automotive chip market is dominated by a handful of companies, and the industry has faced difficulties amid the Covid-19 pandemic as a shortage of automotive semiconductors has sent prices soaring.

Hyundai Motor's localization project is seen as a response to the increasing importance of ensuring a stable supply of automotive semiconductors in the future. The ability to secure vehicle semiconductors is becoming a key factor in determining future mobility market leadership. Electric vehicles and autonomous vehicles are expected to become mainstream in the future and will require more than 2,000 automotive semiconductors, more than 10 times that of internal combustion engine vehicles.

During the epidemic, Hyundai's production and vehicle deliveries were delayed for more than a year due to automotive chip supply issues, causing sales to suffer.

Hyundai Motor is determined to strengthen its dominance in automotive chips because it realizes that improving its semiconductor supply capabilities can enhance its negotiating power when negotiating prices with global suppliers.

Industry insiders said that multinational companies from Europe and Japan are not easy to negotiate prices with domestic companies, and their delivery time and after-sales support (AS) are not as smooth as domestic companies.

Hyundai Motor plans to continue to increase the localization rate of automotive semiconductors in the future. Previously, the company announced plans to purchase high value-added automotive semiconductors for infotainment from Samsung Electronics starting in 2025.

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