In the face of chip shortages, are automotive regulations and standards gradually weakening as a threshold for automobile entry?

The chip shortage problem is highlighted, and is it becoming a trend to use industrial-grade chips as automotive-grade chips?

Recently, Yifei.com has participated in many domestic integrated circuit summits. Looking at all the sub-forums, automotive electronics is definitely the most popular session, with full seats. I believe everyone knows the reason. On the one hand, with the continuous development of intelligent networking and electrification of automobiles, the cost of automotive electronics will reach 50% of the cost of the whole vehicle, and the total demand will rise exponentially; on the other hand, due to the epidemic, the vehicle manufacturers are too pessimistic about the market forecast and reduce orders to Tier 1. The reduction in orders is transmitted back along the chain, causing the large automotive chip manufacturers to adjust their production capacity, and finally the contradiction of chip shortage is highlighted in a short period of time.

According to industry estimates, due to supply disruptions caused by chip shortages, global automobile production decreased by about 600,000 to 1.3 million vehicles in the first quarter of 2021. According to a research report released by market research firm Bernstein Research, the chip shortage will directly lead to a decline in global automobile production in 2021, with an estimated reduction of 4.5 million vehicles. Against this backdrop, the original party A automakers have also begun to take action to alleviate the dilemma of having no rice to cook.

 
Figure | Schematic diagram of automobile assembly

As we all know, the automotive industry has very strict requirements for chips, and the certification process is very long. This is because cars have very high requirements for reliability and safety. Usually, the design life of a car is about 15 years or 200,000 kilometers, which is much longer than the life requirements of consumer electronic products. And under the same reliability requirements, the more components and links the system consists of, the higher the reliability requirements for the components. Therefore, it usually takes about 2 years for a chip to complete automotive-grade certification, and after entering the supply chain of automakers, it generally needs to have a supply cycle of 5-10 years.

In an open market, the problems of the global supply chain will definitely affect Chinese automakers. In the Sino-US trade war, the import of many chips is restricted. Moreover, at the moment when there is a shortage of automotive chips, the US government and other governments have begun to test TSMC and other foundries in order to meet their domestic demand and reduce the adverse effects of the shortage. my country does not have much advantage in obtaining goods, so it has given many domestic chip manufacturers the opportunity to enter, but my country's accumulation in integrated circuits is too weak, and the types and output of automotive-grade chips are insufficient.

According to a survey conducted by Yifei.com, many companies are currently using industrial-grade chips to enter the automotive aftermarket, and are working with car manufacturers to develop and test new pre-installed products that are "ready to meet automotive standards." This was unthinkable two or three years ago, as domestic car manufacturers would never accept products that did not meet automotive standards, because for them, such joint development and testing was an unnecessary cost.

 
Figure | Domestic processor manufacturers entering the automotive market and chip model standard certification status (Compiled by Yifei.com)

What is the difference between automotive-grade and industrial-grade chips?

Under normal circumstances, to enter the automotive field and penetrate into the supply chain of Tier 1 automotive electronics manufacturers, two tickets must be obtained. The first ticket is the AEC-Q100 (IC), 101 (discrete components), and 200 (passive parts) reliability standards promoted by the North American automotive industry; the second ticket is to comply with the zero-defect supply chain quality management standard ISO/TS 16949 (Quality Management System).

 
Figure | Overview of vehicle regulations

So why can some industrial-grade chips directly enter the automotive aftermarket? What are the differences between automotive-grade chips and industrial-grade chips? The following table shows the difference between the two:

 
Figure | The difference between industrial grade and automotive standards (Compiled by Nonnet)

Compared with general industrial chips, automotive chips have a harsher working environment, usually with working temperatures ranging from -40°C to 155°C, and they have to overcome the problems of high vibration, dust, oil stains, and electromagnetic interference. In the ECU of traditional fuel vehicles, we often see ceramic PCBs, bare chips, gold wires, and aluminum wires connecting external circuits. These processes are undoubtedly a huge challenge for domestic semiconductor or system manufacturers to overcome in a short period of time.

 
Figure | Traditional fuel vehicle ECU board

However, on the new energy vehicle side, not only are the engines and gearboxes gone, but there are also improvements in the environment such as temperature, vibration, dust, and oil stains. Therefore, for semiconductor or system manufacturers, although they have to face stronger electromagnetic interference and other problems, the overall threshold for entering the automotive market is indeed being lowered.

In addition, in the automotive electronics market, not every material has the same requirements. Different parts have different requirements. According to international standards (automotive electronics standards set by the United States), automotive chips can be divided into grade0~grade4, a total of 5 levels, as shown in the following table:

 
Figure | Five levels of AEC and corresponding automotive electronic systems (Compiled by Yifei.com)

Combining the above table with the previous industrial standards, we can find that industrial-grade products can fully cover the communication systems and entertainment systems required by Grade-3 and Grade-4. The chips used in some special industrial products can even fully meet the requirements of Grade-2 and Grade-1 scenarios. This is also the reason why many industrial-grade chips are used as automotive-grade chips as mentioned above.

How effective is the vehicle regulations and standards pass? 

Take AEC as an example. Its origin can be traced back to 1994. Chrysler, Ford and General Motors established the Automotive Electronics Council (AEC) to establish a set of universal parts qualification and quality system standards. It is a group whose purpose is to standardize the reliability and certification standards of automotive electronic components. AEC established quality control standards.

Therefore, the standards for automotive electronics themselves have a certain significance. As automotive electronic systems become more and more complex, from the perspective of the ISO system, providing basic standards will help more companies to respond.

Photo | Lei Guangyin (left), a researcher at the Institute of Engineering and Applied Technology of Fudan University, and Xia Zhen (right), a reporter from Nonnet.

However, the automotive industry should not use standards as the only entry threshold. Lei Guangyin, a researcher at the Institute of Engineering and Applied Technology of Fudan University, told Yifei.com, "I have worked at Ford and NIO, and have repeatedly communicated with the world's mainstream semiconductor suppliers. In fact, everyone does not use certain standards as a blueprint or threshold. Most of them are discussed on a case-by-case basis internationally. Because the standards themselves have advantages and disadvantages. The advantage is that there are strict reference standards in the test, which helps to screen out some suppliers with strong basic capabilities. But there are also some disadvantages, because there is a risk of setting standards that are too high or too low. In addition, the requirements for the composition of components are different for each model with different positioning. For example, for passenger cars, there is a gap in the acceleration performance and torque performance of American pickup trucks and ordinary cars (the driving environment of the vehicles is very different). Unless the standards are graded, there will be asymmetry problems if they are cut off. Therefore, whether it is Ford or GM, they will never judge that a supplier's products meet their requirements based on a certain standard. I believe that domestic car companies are also well aware of these advantages and disadvantages under standardization, so they will define their requirements for automotive chips and other components based on the positioning of their own cars."

Final Thoughts

From the perspective of automobile safety, we need basic standards, but standards should not be the only standards for chip companies to enter the automotive field. Sometimes, even before obtaining standard certification, components that have passed joint tests with vehicle manufacturers and meet the requirements of each other in every indicator can enter the procurement chain of the vehicle manufacturer. The current Chinese automotive electronics industry chain is moving in this direction, but this does not mean lowering standards, because often the requirements of car companies are far higher than the standards.