Chip cost per car: soaring to $1,000

According to Yole's latest report, the market size of semiconductor devices used in automobiles will grow from US$52 billion in 2023 to US$97 billion in 2029, with a compound annual growth rate of 11%.

Current markets indicate that semiconductors will be worth approximately $600 per vehicle by 2023, growing to approximately $1,000 by 2029, with the number of semiconductors per vehicle growing from approximately 800 (in 2023) to over 1,100 (in 2029), driven by ADAS and electrification.

Electrification and ADAS are driving significant growth in the automotive semiconductor market.

1. Power devices: The rise of electric vehicles (EVs) has driven demand for silicon carbide MOSFET modules to effectively manage power conversion. Although BEV growth is slowing globally, the growth gap is being filled by various hybrid technologies, which also require power electronics.

2. MCU: Advanced 16nm and 10nm MCUs are critical for ADAS applications, including radar and sensor control. The evolution of E/E architectures toward domain and regional controllers drives the need for high-performance MCUs while reducing the total number of MCUs.

3. Computing power and memory: Pursuing higher levels of autonomy beyond L3 will require increased memory capacity and computing power. Shipments of all sizes of wafers will increase from approximately 35 million in 2023 to 35% by 2029.

For electrification, vertical integration is increasingly popular among OEMs and can be achieved in a variety of ways: for example, full integration down to the component level, system integration with subcontracted build-to-print parts, strategic partnerships, and direct investments with key component suppliers.

OEM strategies vary by industry and region. The automotive semiconductor sectors where OEMs are investing the most include:

1. Power electronics, especially power module packaging, is a very popular area with multiple OEMs making direct investments, joint ventures or holding minority stakes. Long-term supply agreements are also common, especially among international OEMs.

2. Some new electric vehicle OEMs that operate in a fabless form and focus on multi-core integration also see high-performance SoCs for ADAS or cockpit applications or a combination as a key differentiator.

3. Future E/E-architecture MCUs are attracting OEM attention through various strategies, including direct investment as a fabless company, product-defined joint ventures, and securing franchised manufacturing capabilities from foundries.

Chinese OEMs have shown a particularly strong interest in semiconductor investments, in part because of lessons learned from the U.S.-China trade dispute and COVID-related chip shortages.

While the supply situation for semiconductors has improved compared to previous years, it remains a major issue in 2023.

The Chinese government has made the development of the domestic automotive semiconductor industry a strategic goal, aiming to reduce reliance on foreign suppliers and improve technological capabilities. The Chinese government has set an ambitious goal of sourcing 25% of its components locally by 2025.

BEVs have covered all vehicle types, from A-segment to supercars designed purely for driving pleasure. The rapid rise of hybrid powertrains (especially PHEVs including REEVs) requires more dual-motor systems (1 for electricity generation and 1 for traction).

The trend towards system integration continues, with steady growth in various approaches from both OEMs and Tier 1 suppliers. All-in-one solutions for powertrain domain controllers: combining 3-in-1 e-axles and other power units (OBC, DC/DC, PDU), with the possibility of further integration of BMS and VCU. More and more OEMs, especially in China, are moving towards this approach.

800V is becoming more and more popular, especially the full 800V architecture, which enables high-power charging. By 2030, the 800V penetration rate of light-duty pure electric vehicles will reach 30%. SiC is the most suitable device for 800V, not only for inverters, but also for OBC, DC/DC, air conditioning compressors, and DC chargers outside electric vehicles.

ADAS adoption is accelerating rapidly, driven by safety regulations and OEMs’ drive to achieve higher levels of autonomous driving. ADAS sensors come in many forms, but the main technologies include cameras, radar, lidar, and ultrasonic.

The processor needs to handle the growing stream of data from these three sensors. The computing power required depends on the complexity of the task, the number of sensors, the resolution of those sensors, the complexity of the situation, and the level of redundancy required.

Software-defined vehicles (SDVs) represent a paradigm shift in automotive design, where software plays a central role in defining vehicle functionality and features. This evolution is closely tied to a shift in electrical/electronic (E/E) architectures. To address the limitations of distributed systems, automakers are beginning to centralize functionality into fewer, more powerful ECUs.

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