Source: Content by Semiconductor Industry Watch (ID: icbank) original, author: Li Chenguang, thank you.
In the changing times, whether it is an automaker or a parts supplier, countless new dreams and new challenges are silently shifting in the industrial chain, and those Tier1 giants who are extremely strong in the traditional fuel era try to recreate the grand shore and grandeur of the new era in self-transformation and transformation. Only sometimes, the word "reconstruction" carries hope and means continuous pressure on the end of change.
The "fire" of car chip shortage is still spreading, due to the shortage of chips, since the end of 2020, Volkswagen, Toyota, Ford and many other car companies have implemented production reduction plans. AutoForecastSolutions released data showing that due to chip shortages, the cumulative production reduction in the global automotive market in 2021 is about 10.2 million units.
A global "lack of core" has sounded a wake-up call for the automotive industry. After this painful battle, the automotive chip supply chain is undergoing some unprecedented changes.
In the past, OEMs usually bought parts from Tier1 suppliers such as Bosch and Continental, but the increase in core shortage is changing this tradition, and some car companies have begun to bypass suppliers and directly establish communication channels with chip designers and foundries. At the same time, some car companies have joined the ranks of "core making" in order to grasp more initiative in chip supply.
McKinsey has argued that previous supply methods have led to a lack of transparency. Because the lack of cores lasted longer than initially expected, car companies had to rethink supply chain adjustments and production strategies.
Automakers are nothing more than a move to build more collaborative relationships with chip designers and manufacturers, through better demand forecasting and information sharing, to shorten production lead times and meet long-term and sustained supply demand. However, this supply chain adjustment has weakened the voice of Tier1 manufacturers to some extent.
Compared with the traditional automotive supply chain with a strict hierarchy, in the new automotive supply chain, the participation of car companies is getting deeper and deeper, the supply chain is becoming more and more flat, and there are more and more new ways to play. Especially in the current crisis of the epidemic and the decline in automobile production, the global auto parts industry has been affected by it, in addition to focusing on the supply chain and poor market performance, the strategic adjustment of parts suppliers has also attracted attention.
Among them, Bosch's position in the traditional auto parts suppliers is unquestionable, in the face of automotive technology and market changes, let's take a look at how the Tier1 manufacturers represented by Bosch continue to have a dominant position in the era of traditional internal combustion engine vehicles. How to solve the huge challenge of the separation of automotive hardware and software to its original business model?
In the era of "software-defined cars", the traditional Tier1 vendors have changed and changed
At present, the trend of software-defined cars and software-defined chips is becoming more and more obvious, and the motors, batteries, sensors, lidar, millimeter-wave radar and other hardware of new energy vehicles are standardized products in the future, and its difference lies in the quality of the software, in how to make the hardware play more performance through software, and a better user experience will determine the difference and premium ability of the product.
The white paper "Software-Defined Vehicles: Insights into the Development Trend of China's Intelligent Vehicle Software Industry" released by CCID and Neusoft also pointed out that under the development trend of electrification, networking, intelligence and sharing, automobiles are gradually transitioning from mechanical drive to software-driven, and the transformation of automotive electronic and electrical architecture also makes the automotive hardware system tend to be centralized, and the differentiation of the software system has become the key to the differentiation of automotive value.
Therefore, this makes the main engine factory and the chip design company walk into each other and communicate closely with each other. Of course, in order to better chip self-sufficiency and control of performance, a variety of models developed by car companies or bound to chip factories are also being nurtured.
Behind all these unstoppable trends and changes, it is bound to break through the previous "impregnable" traditional automotive chip supplier pattern, and the roles and status of various participants in the automotive industry chain are also changing dramatically
Under such a development trend, the relationship between Bosch's previous parts and vehicle companies, by the original pattern of OEMs, first- and second-tier parts suppliers, and layer by layer doing their own things will produce some qualitative changes in the future changes in the automotive industry, and there will be more diversified customers in the future, giving birth to new business models and service models.
Image source: Neusoft Ruichi
The entry of technology companies and software companies into the automotive industry is promoting the change of the supply chain ecosystem, and the automotive industry chain has gradually evolved from the linear relationship of main engine factories, first-tier suppliers and second-tier suppliers to a more complex new automotive ecosystem in which all kinds of enterprises participate. The business model of the automotive industry is also changing from the sale of automotive hardware to the sale of hardware and follow-up services, and the automotive research and development process is also changing from the integrated development of software and hardware to the separate development of software and hardware decoupling. Software has been independent as the core of the component products, automotive software industry chain has been reshaped.
At present, Internet companies and ICT companies with software research and development advantages have entered the game, and together with the traditional automotive software Tier2 manufacturers have become the tier1 of the upstream link; the main engine factory has become the midstream link, but some OEMs are also laying out the upstream software link; the downstream extends to the application service, and the Internet enterprises take advantage of the deep association with consumers to expand the commercial value of the follow-up application service of the automotive software.
In addition to the traditional OEMs, there are also new car-making forces, travel service providers, local technology companies and Internet companies, all of which are transforming into the field of travel services.
At auto show 2021 Shanghai, Bosch exhibited a smart cockpit domain controller system developed in collaboration with local Chinese startup Chelian Tianxia. In this project, Bosch's role is Tier2, which is mainly responsible for platform-based and standardized technology to provide intelligent cockpit domain controller technology platform; Chelian Tianxia is Tier1, which is responsible for customizing, personalizing, customizing, and service-oriented improvement.
At present, AI chip companies, software vendors, Tier1 system integrators, OEMs and other forces have joined the upgrade of domain controllers. The localization has changed the ecology of the automotive industry, and the cooperation model between Bosch and Chelian Tianxia has created a new supply chain collaboration system in the industry. As the world's largest supplier of automotive components, Bosch is also playing the role of Tier2 for the first time, and this transformation means that Bosch is beginning to adopt a more open and flexible business model.
In terms of its traditional advantage ADAS, the trend of separation of software and hardware has also brought great potential impact to Bosch, including start-ups such as Weilai and Xiaopeng Motors and some traditional OEMs have begun to tend to obtain core technologies in the field of autonomous driving through "full-stack self-research" in an attempt to get rid of the dependence on Tier1 such as Bosch. Some companies that do not have the ability and conditions of "full-stack self-research" also hope to master some core technologies, rather than directly buyIng Bosch's "family barrel".
In the traditional architecture of fuel vehicles, Tier1 has a relatively solid position, but with the reshaping of the supply chain and the evolution trend of automotive electronic and electrical architecture, the traditional Tier1 does not occupy too many advantages and faces many challengers. How should they respond to the trend of car companies strengthening self-research?
Taking Bosch as an example, Xu Daquan, executive vice president of Bosch China, said that Bosch has a strong scale advantage and research and development strength, and has a long-term accumulation in the understanding and safety of cars. In the face of changes in the industrial chain, Bosch can provide hardware, can also sell software, or integrate software and hardware in a system to provide customers with flexibility to meet customer needs.
It can be seen that the traditional Tier1 began to emphasize transformation, emphasize industrial chain cooperation, and no longer hand over ready-made products to car companies as in the past, but jointly develop autonomous driving software and hardware.
In addition to adopting a more open and flexible business model, Bosch is also adapting its organizational structure to adapt to the new situation. At the beginning of 2021, Bosch Intelligent Driving and Control Division was officially established, which is integrated from Bosch's original powertrain control domain, body control domain, intelligent cockpit domain, and automatic driving domain, focusing on the research and development of future automotive electronic and electrical architecture, coordinating vehicle computers, control units and sensors, and providing customers with electronic systems and necessary software. In order to comply with the future automotive electronic and electrical architecture is also more in line with the trend of "soft and hard separation".
At the same time, in order to strengthen the software business, Bosch has also set up a software center in Wuxi to better adapt to the needs of local customers and improve response speed. According to reports, in order to bet on the strategic new heights of "software-defined vehicles", Bosch has invested up to 1 billion euros in the field of new four modernizations in 2020, and the current annual expenditure in the software field has reached 3 billion euros. According to Bosch's latest plan, in 2022, the automotive independent application software R&D business and the cloud business will be further integrated into the subsidiary ETAS, and in the future, ETAS will develop and sell the basic software, middleware, cloud services and R&D tools of automotive general purposes.
It can be said that since around 2020, the traditional Tier1 is redefining its role in the automotive industry circle, but without exception, it has built software-based business competitiveness as the core of development.
But it's undeniable that software-defined cars must be built on the computing power at the core of electrical and electronic architectures. Without the foundation of hardware, software cannot run, so as a traditional parts giant, in addition to breakthroughs in the field of automotive electronics and software, on the other hand, it is necessary to continue to maintain the traditional market share, requiring both software and hardware lines.
In the era of traditional automobiles, Bosch is undoubtedly the "key gentleman" in the industrial chain, as can be seen from its innovations in magnetoelectric ignition devices, ABS systems, ESP systems, iBooster products and steer-by-wire systems. Today, with the changes in the market and the situation, what Bosch has to do is to focus on the difficult underlying software part from the operating system to the AUTOSAR level, the chip and even the interface level, with the accumulation of hardware, vehicle technology and architecture.
Source: Automobile Commune
In the era of "software-defined cars", traditional Tier1 manufacturers, including Bosch, have made breakthroughs in the field of automotive electronics and software, and what has not changed is to continue to maintain the basic disk of traditional business and maintain two legs.
Bosch's diversified layout
In addition, in the face of the lack of core cores and insufficient production capacity of automobiles mentioned at the beginning of the article, some parts giants, including Bosch, have begun to consider improving their internal wafer manufacturing capabilities and control capabilities for the supply chain, and reducing their dependence on external foundries.
In 2021, bosch Dresden fab rolls off the production line for the first silicon wafers, focusing on automotive chip manufacturing, while also working with special process semiconductor manufacturer Global Foundries to develop and produce high-frequency radar chips for autonomous vehicles. A series of actions can be seen that Bosch is laying out in the field of automotive chips through different ways such as building factories and investing in cooperation.
In addition to its own strategy transformation and diversified exploration of business models, Bosch is also actively deploying investment cooperation.
Recently, Boyuan Capital, a subsidiary of Bosch Group, has made a strategic investment in black sesame intelligence, a manufacturer of autonomous driving computing chips, and the two sides will deepen comprehensive cooperation in the field of automatic driving, work together to create intelligent driving solutions, and further promote the commercialization of automatic driving.
Founded in 2021, this capital company is a market-oriented investment platform focused on China's deep technology field established by Bosch, based on Bosch's global business network and R&D resources, hoping to bring strategic value and industrial empowerment to China's local high-tech industry. Key investment directions include sustainable transportation, smart manufacturing and the Internet of Things, artificial intelligence, semiconductors and carbon neutrality.
Previously, bosch group has invested in key enterprises in the value chain of China's autonomous driving industry, including software platform supplier Momenta, lidar manufacturer Hesai Technology, autonomous driving solution providers Yishi Technology, Mainline Technology and AImotive, silicon carbide device supplier Basic Semiconductor, and automatic driving map manufacturer DeepMap. After this investment, the Bosch Group has further improved its layout in the autonomous driving industry chain.
At the same time, Bosch also cooperates and cooperates with industrial chain enterprises in depth, such as all-round cooperation with Daimler's traditional OEMs in autonomous driving; some cooperation with China Mobile in V2X; cooperation with Sony in camera technology; cooperation with Nvidia in chips and software; and cooperation with many domestic map vendors in high-precision maps and positioning.
Image source: Autodealer car dealership
Chen Yudong, president of Bosch China, said frankly that in the process of transformation to intelligence, electrification and networking, the boundaries of the automotive supply chain are being broken, and the boundaries of the commercial supply chain are also being broken, and reshaping the supply chain is to do mutual penetration, you have me, I have you. This is an ecosystem of mutual cooperation and win-win results.
It can be seen that whether it is internal management or cross-field cooperation, Bosch is gradually developing towards flattening at this stage.
Write at the end
With the improvement of automobile electrification and intelligence, the transformation of the demand of OEMs affects the development process of the automotive industry chain. Compared with the turnkey model of Tier1 in the traditional automotive supply chain, the current auto brand and supplier are more cooperative, and joint research and development and flat cooperation have gradually blurred the boundaries of the supply chain ecosystem, and the needs of business models have become more and more diverse.
Compared with the dilemma of many large companies, Bosch's transformation path is unusually low-key and resolute. At present, in the deep water area of transformation, its role has also been given a new definition in the reshaping of the industrial chain.