Cargo column transmission | NXP Li Tingwei: lack of core will redefine the "automotive architecture"

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"A chip, like air and water, is important but difficult to perceive; it is only when air and water are insufficient or contaminated that people perceive its importance."

Recently, Li Tingwei, chairman of NXP Greater China, said in an exclusive interview with the surging news (www.thepaper.cn) reporter that this round of chip shortages is not only caused by the new crown epidemic, but also superimposed on the trend of intelligent and electrified vehicles. Even if the epidemic is over, it will not go back to the past, and the "lack of core" will be the new normal, and a new model needs to be built.

Since the beginning of this year, the world has encountered a shortage of automotive chips, and many auto manufacturers have been forced to stop production and reduce production, and major automakers have sought assistance from auto chip companies. At NXP's Greater China headquarters in Shanghai, Li Tingwei received wave after wave of automakers, and his office wall hung a group photo taken by executives of a number of auto companies when they came to visit.

This was rare in the past. According to the previous supply chain model, automakers regard chip manufacturers as second-tier suppliers and do not communicate directly with chip manufacturers, and first-tier suppliers such as Bosch and Continental are the bridge between the two sides.

The "lack of core" storm has directly "narrowed" the distance between automobile manufacturers and chip manufacturers. "Basically, all the major automakers came and talked to us about their needs." Li Tingwei said.

Even so, in the short term, chip manufacturers have little room to maneuver.

"The chain of semiconductors is very long, it's like a long highway, and accidents in one place, such as a factory accident, a snowstorm in Texas (in the United States), and the new crown virus, and so on, can lead to the paralysis of the whole road, the whole market." But at the same time, demand has not decreased, which has also exacerbated the negative consequences of this accident. Li Tingwei said.

"Missing core" is the norm

In recent years, with the evolution of chip processes to technologies such as 5nm and 3nm, the cost has become higher and higher, and the industry has the view that Moore's Law has come to an end.

"Now that Moore's Law is almost at its end, we're entering an era where demand (end demand) is pulling, but the chip industry isn't quite ready yet." The market and industry are in a period of adjustment or transformation, and stock shortages will become a norm in the short term. Li Tingwei said that there is an essential difference between today's shortage of goods and the past cyclical oversupply or short supply, and the previous model must be adjusted, which is also the beginning of a new era from another perspective.

The wave of "lack of core" that swept the world has affected the entire automotive industry, and major car manufacturers have frequently staged production cuts or production stoppages, and production capacity has been significantly impacted.

Li Tingwei explained that chips are a complex supply chain, from order to supply, there is a long cycle. But this time it can't be explained entirely by periodicity, and the situation is much more complicated. "The future may not be as serious as the shortage as it is now, but there is a lot of uncertainty. We can think of this as a resource mismatch. ”

Li Tingwei attributed the main cause of supply chain shortages to "resource mismatch". A vehicle needs many chips, even if only one chip is out of stock, then the whole vehicle cannot go offline. Indeed, the electrification and intelligence of automobiles have led to a sharp increase in chip use in the automotive industry, and the production capacity of many chips is difficult to keep up quickly.

Recently, Intel CEO Pat Gelsinger predicted in a live speech at the German International Automotive and Smart Mobility Expo that by 2030, semiconductors will account for more than 20% (quantity) of the high-end automotive bill of materials (BOM), an increase of 5 times over 4% in 2019.

"Even if the total supply of chips in the Chinese market today is greater than the demand, it is possible that there is still a shortage of chips, which is caused by a mismatch of resources." As long as a vehicle lacks a chip, it cannot go offline. In the past, we talked about technology and cost performance, but now supply chain security and ecological cooperation are particularly important, which is also a very important new variable and dimension. Li Tingwei believes that in the future, everyone needs to integrate into a new ecological chain through cooperation to achieve a win-win situation.

The COVID-19 pandemic has also had a huge impact on the automotive chip supply chain management model.

Li Tingwei introduced that the original car manufacturer may have thousands of first-class suppliers, for the procurement of car manufacturers, the past model was to hope for zero inventory, or even negative inventory, but now the uncertainty caused by serious shortages of goods makes this model must be adjusted. Automakers need to communicate directly with chip manufacturers to let chip manufacturers grasp first-hand demand information, and chip manufacturers also need to inform automakers of their own technical routes to assist them in technical iteration and update.

Turn on the new mode

It can be seen that in the context of the new crown epidemic, the "old model" supply chain of automotive chips is fragile.

On the one hand, the uncertainty brought about by zero inventory or even negative inventory has directly hit the production capacity of automobiles, and the consumer car pick-up cycle has become longer and longer. On the other hand, the popularization of electrification and intelligence in the automotive industry, the demand for chips continues to increase.

Li Tingwei said that the automotive industry is ushering in a century of unprecedented changes, bringing many opportunities and challenges, the next decade, the latest technology will be realized in the car.

"This is a new era, the architecture of the car will be redefined, and the goal of chip manufacturers and car manufacturers is to win-win. As a chip manufacturer, we tell automakers what our core components are and how to develop them. Just like mobile phone chip manufacturers in the past, they will communicate with operators because operators provide services. Now the entire automotive industry landscape has changed, it used to be layer by layer, and now it is more like a network. ”

In Li Tingwei's view, automotive chips need to increase computing power, because technologies such as automatic driving require rapid calculation and response to a lot of asymmetrical data.

In the past, many automotive chips used mature technologies such as 90nm and 40nm for safety and stability considerations, but now the new trend in the industry forces automotive chips to adopt new technologies and new processes to increase computing power.

Li Tingwei revealed that NXP is ready to launch a chip for the 5nm process. "The vehicle's electrical and electronic architecture is shifting towards greater integration, so a lot of individual chips are likely to disappear in a few years." For NXP, a lot of our current development is platform-based, taking into account backwards compatibility and security, and the software requirements inside are particularly high. ”

According to him, the amount of software in a car has now reached 100 million, and in 5 years, the accelerated development of intelligence will promote the software in a car to reach 300-500 million.

With the increase in demand for automotive chips, the share of automotive chips in the chip industry will also increase rapidly. "At present, automotive chips only account for about 10% of the entire semiconductor chip, if the global semiconductor chip can reach a scale of 450 billion US dollars, automotive chips may only be 45 billion, the next few years automotive chips will have rapid development." Li Tingwei said.

In his view, under the new industry pattern, practitioners need to do two things: first, to have good products and technical support; second, they also need to think for customers how to help their products quickly achieve commercialization. The essence of the chip is to be self-interested through altruism, and only if the customer succeeds, the chip manufacturer can succeed. Li Tingwei said that the new ecological chain cooperation is still in its infancy, which provides many opportunities for new entrants.

Reconstruct the ecological chain

As a leading manufacturer of automotive chips, NXP has begun to restructure its supply chain. Major automakers frequently visit for chip support, and NXP also hopes to take this opportunity to build an ecosystem and achieve a win-win situation.

"In the past, the way was capital integration, and now we need ecological cooperation, and everyone should integrate into the ecological chain, coexist and prosper, and jointly promote the landing of the final application." Li Tingwei said bluntly that in the past, everyone has also talked about the concept of ecological chain, but has not really practiced, this is a new era, in addition to excellent strength and ability, the spirit of cooperation is crucial to the success of business.

As the head of NXP Greater China, Li Tingwei is actively promoting the reconstruction of NXP's ecosystem in Greater China.

"For NXP, especially in China, we need to think about how to better support a variety of small and medium-sized enterprise customers, how to cooperate more efficiently with the industrial chain, this cooperation is not only vertical and horizontal, but also requires a certain depth and breadth." For example, NXP will now actively cooperate with car manufacturers, and previously chip manufacturers were Tier 2 (tier 2 suppliers) for car manufacturers, and car manufacturers will directly find Tier 1 (tier 1 suppliers), and Tier 1 will cooperate with us. Li Tingwei said that "ecology" is ultimately for supply, how to turn technology into commodities and realize the needs of end customers.

Recently, NXP has announced a series of ecological chain cooperation.

On September 27, NXP announced that its Trimension Ultra Broadband (UWB) solution has been adopted by Xiaomi's latest flagship phone, the Xiaomi MIX4, with support for its new "One Finger Link" feature. This time, UWB technology can be used in Xiaomi mobile phones to quickly and accurately connect to smart speakers and televisions and other devices in the Xiaomi smart home ecosystem.

NXP's UWB can also be used in cars, becoming car keys, and mobile phones will be connected to cars.

On September 10, NXP signed a strategic cooperation agreement with GAC Research Institute and Continental group in Guangzhou, where the three parties will jointly create a new generation of intelligent networking products for the future.

On September 1, NXP and Horizon signed a strategic cooperation agreement in Shanghai to jointly develop pre-integrated, mass-scale solutions for advanced assisted driving (ADAS) and high-level autonomous driving.

On July 19, NXP Semiconductors and SAIC Zero Beam officially signed a memorandum of strategic cooperation. The two sides will start from chip technology cooperation, share their respective resource advantages, and focus on customer needs in the software-defined automotive era.

"With the intelligent, networked and electrified development of automobiles, the linear cooperative relationship in the automotive industry chain is evolving towards a mesh structure, and under the current ever-changing format, NXP is working with partners to accelerate industrial ecological innovation everywhere." Li Tingwei introduced that NXP's idea is to follow the trend and change the traditional cooperation model, become a powerful adhesive in the automotive industry chain, and closely unite with all parties in the industry chain and strengthen interaction.

"Autonomous driving is more complex than mobile communication, and there are also high requirements for safety, which gives us a certain opportunity. Autonomous driving technology is leading the way in the shape of society as a whole, and there is a lot of homework to be done. Many of our technologies in the four major areas of automotive, industrial Internet of Things, mobile devices and communication infrastructure may be applied across industries in the future, such as UWB on the one hand in the mobile phone, the future will also be applied in the car, become a safe car key, mobile phone will be connected with the car. We are very proud to build better cooperative relations with local Chinese customers, accelerate the landing of some innovative applications, and achieve a win-win situation. Li Tingwei said that in the past, enterprises only needed to consider the iteration of technology to do product roadmaps, but now we have to consider more if the technology is transformed into terminal goods and applications, "so we have come to an era full of opportunities, but also full of challenges." ”

Big opportunities for automotive chips

"The automotive chip industry is relatively scattered compared to mobile phone chips, which has very rich functional requirements, such as simulation, data transmission, processing, sensing, connection, etc., of course, the most important thing is security." From this point of view, this is a new world, there are many new opportunities, and the pattern of the automobile industry will be different in the future. Li Tingwei said.

At present, autonomous driving technology can be divided into different levels, and higher levels require supporting support from the surrounding environment, otherwise they cannot be achieved, but some low-speed mobile devices can be done first.

"In the future, this low-speed mobile device is equivalent to a private space, which can be parked 2-3 kilometers away near the home, and it will automatically drive through the next command of the mobile phone." As for the price, if the price of a house may only be one square meter in comparison, people generally have the ability to pay. In this way, the ownership of such low-speed mobile devices can be large. Li Tingwei said.

According to this logic, in the case of perfect road construction, China's intelligent automobile industry may have a huge explosive force.

"The new four modernizations of automobiles are developing rapidly, and we have a lot of cooperation with China's leading enterprises. At the same time, NXP can help local businesses in China grow through resources that partner with global companies. For example, NXP recently reached a strategic partnership with Horizon, a leading local AI chip supplier, and we have also joined hands with local software partner Yingchi Technology to connect software and hardware operating systems to provide integrated production-grade solutions. For them, automotive is a new industry, and NXP is a core supplier of traditional automotive chips, and it can be said that we know more about automotive chips. The three parties complement each other's strengths, empower each other, and meet localization needs at a deeper level."

Of course, NXP is not the only player in the automotive chip market. There are also many chip companies in China that are promoting the research and development of automotive chips.

Li Tingwei believes that China is a very important market, the government is also very good at long-term planning, Chinese companies have policy and financial advantages, but to develop semiconductors should also maintain an open and cooperative attitude. "Because semiconductors are a very globalized and highly cooperative division of labor, no single company can make all the products completely independently. The development of local enterprises is inseparable from the cooperation and support with global enterprises, which has many cooperation opportunities. I believe that embracing cooperation with an open mind and complementing each other's strengths will lead to better growth. ”