The automotive chip crisis still exists, and representatives of the two sessions suggest "ensuring and stabilizing supply"

In recent years, chip shortages have been a hot topic in the industry. Despite the continuous expansion of production by international giants such as TSMC, the chip shortage problem has not been alleviated under the impetus of the "New Four Modernizations" in the automotive industry. Against this background, the chip industry has received unprecedented attention and has become a "bottleneck" area that my country currently needs to focus on.

Faced with this problem, at this year's National People's Congress and the Chinese People's Political Consultative Conference, many representatives put forward suggestions and advice on policy support for the integrated circuit industry, technological innovation, and establishing a standards system to solve the "bottleneck" problem.

Promoting localization of chips

As a major automobile sales country, my country sells about 25 million vehicles each year, accounting for more than 30% of the world. In the global chip market, my country's production scale is only 15 billion, accounting for 4.5% of the global production capacity. Key components such as MCU are basically supplied by foreign chip companies, and the import rate exceeds 80%-90%. In terms of chip manufacturers, most of the MCU suppliers on the market are foreign companies, and there are not many domestic companies that make automotive-grade MCU products. Therefore, accelerating the development of my country's chip industry chain has become a major focus at present.

Regarding this issue, Chen Hong, deputy to the National People's Congress, Secretary of the Party Committee and Chairman of SAIC Motor, suggested that policy guarantees should be strengthened to promote the development of domestic high-computing power chips. Through policy guidance and multi-party collaboration, unified technical specifications and standards for automotive-grade chips should be established, and a third-party testing and certification platform should be established; it is recommended that the state take the lead in setting up special funds to encourage chip companies and automobile companies to participate together, and accelerate the formation of domestic high-computing power chip research and development, manufacturing and application capabilities.

In addition to promoting the development of domestic chips, avoiding chip supply interruptions is also an important part of ensuring the development of the automotive industry. Zeng Qinghong, deputy to the National People's Congress, secretary of the Party Committee and chairman of GAC Group, suggested that first of all, we must ensure stable supply, sort out the supply and demand of chips in key areas, guide foreign automotive chip companies to invest in China, and establish an emergency reserve mechanism for chips and important raw materials; second, we must stabilize the market, strengthen law enforcement supervision, regulate the disorderly rise in raw material prices, and relieve corporate pressure; strengthen node research and development, orderly break through key bottleneck areas such as R&D, manufacturing, and packaging; and strengthen application traction, increase support and talent introduction, and accelerate the pace of chip localization. Only when the government, R&D institutions, and enterprises work together can we truly solve the chip bottleneck and promote industrial development.

In addition, Zhang Xinghai, a deputy to the National People's Congress and founder of Xiaokang Group, also put forward his own suggestions on issues such as the shortage of automotive chips and the localization of chips. He believes that in the face of the problem of "supply cuts" in automotive chips, it is difficult to effectively regulate and solve it by simply using market means. In the long run, this requires more use of the institutional and mechanism advantages of my country's socialist system of concentrating resources to accomplish major tasks, and using the power of the state to promote the rise of the domestic automotive-grade chip industry. Although the country has introduced a series of policies, the Ministry of Industry and Information Technology is also continuously organizing relevant forces to focus on solving the problem of automotive chip shortages, including the establishment of an automotive chip innovation alliance, the establishment of a chip supply and demand exchange platform, and the punishment of chip hoarding and price increases, which have achieved positive results, but there is still a long way to go to fundamentally realize the independent and controllable development of automotive chips.

To this end, Zhang Xinghai suggested that the national ministry should set up a competent department for automotive chips to formulate the top-level design and supporting measures for the development of the automotive chip industry, coordinate resources, and coordinate the R&D, manufacturing, and application of domestic automotive chips to ensure the active, steady and efficient development of domestic automotive chips and achieve domestic substitution as soon as possible. At the same time, Zhang Xinghai also suggested encouraging vehicle companies and chip companies to cross-border cooperation and joint innovation, actively promote R&D innovation, industrialization innovation, management innovation, etc., and the government should introduce R&D subsidies, tax reductions and exemptions, financial interest subsidies and other policies to accelerate the realization of "chips on the car".

Car companies accelerate their escape from difficulties

In addition to national-level support for maintaining stability, my country's automobile companies have also begun to develop their own chips or cooperate with chip suppliers to develop their own chips.

In January this year, SAIC Group announced that it would carry out strategic cooperation with the Shanghai Institute of Microelectronics and Information Technology to jointly initiate the establishment of a "Domestic Automotive Chip Special Fund" with a scale of tens of billions of yuan to jointly promote the accelerated implementation of automotive-grade "Chinese chips". Great Wall Motors also made a strategic investment in Horizon, an automotive smart chip company, in February last year. According to the "2025 Strategy" of Great Wall Motors, the cumulative R&D investment will reach 100 billion yuan in the next five years, and key core technology areas of third-generation semiconductors such as high-computing chips and silicon carbide are one of the key development directions. In addition, companies such as BAIC Group, GAC Group, and Dongfeng Group have also invested in and cooperated with chip companies.

Compared with the above-mentioned automakers, BYD entered the chip field earlier. In 2010, BYD launched its self-made 1.0 generation IGBT chip; in 2015, BYD's self-developed IGBT2.5 chip was born, and its models began to use self-made chips; in 2020, BYD became the first domestic automaker to mass-produce self-developed silicon carbide chips. When there is a supply shortage of chips, BYD can also provide chip products to other automakers. It is understood that BYD has entered the supply system of manufacturers such as Xiaokang Automobile, Yutong Automobile, Foton Motor, Beijing Times, INVT, Blue Ocean Huateng, and Huichuan Technology.

In addition, the automotive-grade 7nm process automotive-grade SoC chip developed by Geely Auto's chip company will also be mass-produced in the third quarter of this year, and will be installed in vehicles as planned at the end of the year.

In addition to traditional car companies, new car manufacturers have also made some arrangements in the chip field. Among them, NIO is a new car manufacturer that made strategic investments relatively early, mainly investing in two chip companies, Cambrian Xingge and Black Sesame, and forming a chip manufacturing alliance with Ideal Auto. Xpeng Motors and Leapmotor have chosen to develop their own chips, among which Leapmotor's self-developed Lingxin 01 chip has been mass-produced and installed in vehicles.

Whether cooperating with chip companies or choosing to develop their own chips, it means that having the source of chips in their own hands is the first priority for automakers to solve the chip shortage. It is also an important measure that the industry must take.