SIA: China's role in the global automotive semiconductor industry chain will only become more and more important

Jiwei Network News, on December 24, under the guidance of Shanghai Municipal Commission of Economy and Information Technology and Pudong New Area Science and Technology Commission, the "First Jiwei Automotive Semiconductor Ecological Summit" hosted by China Semiconductor Investment Alliance and undertaken by Zhangjiang Hi-Tech and Aijiwei was officially held in Shanghai. As one of the highlights of the summit, the "Analyst Conference" attracted the attention of many automakers and automotive chip manufacturers, and the venue was full, and the latest industry reports issued by many analysts set off a climax of the meeting.

Jijiwei had the honor to invite Jimmy Goodrich, Vice Chairman of Global Policy of the American Semiconductor Industry Association (SIA), to give a speech entitled "AUTO CHIP INDUSTRY & PUBLIC POLICY" on the current situation of global automotive semiconductors, future growth momentum, the impact of automotive core shortages and response models.

Jimmy Goodrich first elaborated that with the rapid development of automotive electrification, electronics and autonomous driving technology, cars gradually have a consensus concept of "computers on wheels", although the current global semiconductor market of $500 billion is mainly driven by PCs, data centers, communications, etc., but automotive semiconductors are one of the fastest growing market segments, and the average annual compound growth rate of the next 5 years is expected to be 5%, significantly higher than that of the consumer electronics industry. And according to the World Semiconductor Trade Statistics Organization (WSTS), the global automotive industry accounts for about 11.4% of semiconductor sales demand.

What is the future growth potential of automotive semiconductors? We can get a glimpse of the evolution of traditional fuel vehicles to electric vehicle technology. Jimmy Goodrich analyzed that an ordinary traditional fuel-powered car will generally carry 1400 chips, ranging from airbag control and collision avoidance devices to parking assistance. With the accelerated expansion of the pure electric vehicle market size and the enrichment of in-car entertainment systems, automotive safety systems, audio systems, visual navigation, transmission systems, etc. are facing major technological generational innovations. He specifically said: "Regarding the management of the on-board battery, which wheel should be equipped with how much electricity, these must be achieved by semiconductor components. Then there's the main drive itself, the battery-powered rotor that accelerates the wheels, and all the complex controls and management will be driven by increasingly sophisticated automotive-grade semiconductor technologies. And this trend fits the global demand to control carbon emissions and combat climate change: "McKinsey predicts that by 2030, 75% of new passenger car sales will be electric. Electric vehicles are critical to reducing carbon emissions from the global population, and are essential to meeting the climate change goals announced by governments around the world, including China, the United States and Europe, which are part of the ambitious plan. ”

Parallel to the dual track of automobile electrification is a breakthrough in autonomous driving technology, which is driving the promotion of three-dimensional technologies such as long-range radar, LiDAR, in-vehicle camera systems, and ultrasonic sensors. Based on this, Jimmy Goodrich gave a set of data: the total amount of semiconductors in a car will grow exponentially, from about 35% today to 40%, and will reach about 50% by 2030; the market for autonomous driving chips will also triple to billions of dollars.

However, the current development of the global automotive semiconductor industry is also facing some major challenges, and the industrial supply chain is plagued by the epidemic and "lack of core". The global COVID-19 pandemic has spurred growth in other semiconductor terminal markets, squeezing production capacity for automotive-grade chips, and when the automotive industry rebounded in sales at the end of 2020, it encountered an increasingly severe chip shortage. Jimmy Goodrich pointed out that the chip shortage crisis has caused many leading automakers to rethink the original zero-inventory model, and many auto companies have maintained a seamless relationship with chip manufacturers, working through Tier 1 or Tier 2 system integrators, such as Bosch or Continental. After the second half of 2020, the war between automotive chips and other electronic chips for production capacity intensified, Jimmy Goodrich analyzed: "Chip factories have pushed the capacity utilization rate to nearly 100%, frankly, this is amazing." It has been going on for months since the global chip shortage began. In 2021, the semiconductor industry aims to launch 26 new fabs, with another 26 under construction. ”

The trend of fab expansion is not expected to subside for some time to come, and this assertion can be supported by these sets of data summarized by Jimmy Goodrich: first, the capital expenditure on automotive integrated circuits reached $148 billion in September this year, an increase of 30% over 2020, and the average annual expenditure is expected to reach $156 billion in the next five years; second, the global semiconductor manufacturing sector is expanding its capacity at mature process nodes (28 nanometers to 40 nanometers). In short, the automotive industry is so deeply affected by the global semiconductor shortage that it has raised the attention of global politicians and many capitals, making them truly aware of the importance of the semiconductor industry as a basic technology.

Jimmy Goodrich finally concluded that with the vigorous development of automobile electrification and autonomous driving technology, the role of Chinese mainland in the global automotive semiconductor industry chain will become more and more important; the United States has also specially allocated funds to focus on investing in mature node fabs in automotive semiconductors, and South Korea has also introduced a "K-belt" semiconductor strategy accordingly, and France, Germany and so on are not far behind. In the future, the global automotive semiconductor industry chain will inevitably be unique and renewed.

(Proofreading/Jenny)