Core Intelligent Driving -- A collection of the views of famous experts in production, education, research and enterprises, a comprehensive analysis of THE opportunities and challenges of AI chips, third-generation semiconductors and other opportunities and challenges in the era of "great deformation" of automobiles!
Jiwei Network reported that since the end of 2020, the lack of core of automobiles has made automakers and suppliers realize that stable chip supply is crucial to the future development of automobiles, and thus pressed the acceleration key of industrial reshaping and manufacturer layout, they have entered the semiconductor supply chain through cooperation, investment or self-research, etc. Some OEMs have even gone deep into the "hinterland" of the supply chain - wafer foundries, such as Ford will invest in cooperation with Global Foundries to develop chips for mature processes. All in order to build a stable supply of chips on the road to autonomous driving and electrification development, and calmly cope with the current and future changes in industry and technology.
Among the automotive suppliers, in addition to the "leader" Bosch already has its own fabs, due to the company's focus on the field, long-term strategy considerations, continental group, HELLA and other manufacturers in the global shortage of automotive chips, still decided not to produce their own semiconductors, by formulating a longer-term plan, more close cooperation with suppliers and customers to change the chip design and other ways to deal with the lack of cores.
But there are exceptions, after Bosch, the world's second largest automotive supplier, Denso will also enter the field of semiconductor manufacturing. On February 15, 2022, TSMC, Sony Semiconductor Solutions Corporation, and Denso Corporation (DENSO) announced that DENSO will acquire a minority stake in Japan's Advanced Semiconductor Manufacturing Co., Ltd. (JASM) with a US$350 million investment. Nippon Advanced Semiconductor Manufacturing Co., Ltd. is a manufacturing subsidiary in which TSMC has a majority stake in Kumamoto Prefecture, Japan. Through this equity investment, DENSO will hold more than 10% of JASM's shares.
In fact, since the beginning of TSMC's construction of a factory in Japan in July and August last year, the news of Denso's intention to invest has flowed out. Now that the "boots have landed", combined with Denso's own accumulation in the semiconductor field and the investment map in the field in recent years, the investment in JASM seems to mean that it has gathered the last and most critical piece of the puzzle on the road of "core making".
The connection between DENSO and semiconductors is very deep, and the field of automotive power semiconductors is hardcore
Denso and automotive semiconductors have a deep connection, and have long been independently developing and mass-producing automotive semiconductor products. Although it is not a major business, Denso has a special sensor and semiconductor business unit in addition to its business units such as thermal management, powertrain, electrical systems, and automotive electronics.
Denso Sensors and Semiconductors business units have the ability to develop and manufacture microelectronic devices, such as automotive power semiconductors, semiconductor sensors, and integrated circuits, as well as advanced technologies and patents, as well as the development capabilities of semiconductor vertical integration, from semiconductors to ECUs and actuators, to meet the needs of complex and compact system products. According to the company's 2020 annual report, the division's revenue in fiscal 2020 was 139.2 billion yen, accounting for 2.7% of the company's total revenue.
Source: Denso
In particular, it is worth mentioning that in the field of automotive power semiconductors, Denso is a hard core. According to Denso, on-board power semiconductors are like muscles of the human body, moving in response to instructions from the ECU (brain), such as inverters and motors and other components (limbs).
In the field of IGBT, according to Yole's 2020 global top 15 IGBT producer revenue rankings, Denso ranks seventh, with revenue reaching $155 million, an increase of 10% over 2019, ranking fourth year-on-year, and onsen-the-same, the development prospects are very impressive.
Image source: Yole
DENSO is also continuing to develop SiC. Denso said that at present, the current on-board products are still commonly used in silicon (Si) made of traditional power semiconductors, SiC compared to Si in high temperature, high radio waves and high voltage environments with better performance, SiC in reducing the power loss of inverters, products small and lightweight and other aspects of the advantages are significant, which also makes it as a raw material for devices that accelerate vehicle electrification and attract much attention. For example, power modules for boosting power equipped with Denso SiC power semiconductors have reduced the volume by about 30% and reduced power losses by about 70% compared to the Si power semiconductor products used in the past, thereby miniaturizing the products and improving vehicle energy efficiency.
Denso has developed SiC power semiconductor devices that combine its own unique construction and processing technologies, which involve the comprehensive development of technologies from wafers to power modules, and are installed and applied to in-vehicle products, extending the range of electric vehicles. Toyota's new mirai model, which was officially released in Japan on December 9, 2020, is equipped with Denso's next-generation boost power module.
Increased its holdings in Renesas, invested in Infineon, and continued to extend to the "hinterland" of the semiconductor supply chain
In addition to self-research, Denso has also been continuously extending to the "hinterland" of the semiconductor supply chain through investment and equity participation.
In previous years, electrification and autonomous driving – these two major trends in the automotive industry have long been clear, and these advanced technologies are inseparable from chips, for example, sensors that act as the "eyes" of the car need CIS chips, car "brains" need artificial intelligence chips, and car "muscles" need power semiconductors. However, the ability of any enterprise is limited, relying only on self-research not only requires huge funds, but will lag behind competitors due to long time, and rub shoulders with this wave, cooperation, shareholding, investment is an important measure.
In 2018, with Tesla as the center, there were some new car-making forces that began to emerge, and they were subverting the original supply chain relationship, accelerating the transformation of the automotive industry, and the participants in it were also catching up.
In 2018 alone, DENSO increased its stake in Renesas, invested in Infineon, and cooperated to establish an autonomous driving research and development center, which are all important measures to consolidate its influence and expand its strength in the field of electrification and autonomous driving.
In January 2018, DENSO announced a partnership with FLOSFIA, a technology startup founded at Kyoto University, to invest in and develop gallium oxide, a next-generation power semiconductor material, which will reduce and reduce energy consumption, cost, size, and weight for inverters used in electric vehicles more than SiC, a third-generation semiconductor material.
In March 2018, Toyota announced that it had invested $2.8 billion in a joint investment of US$2.8 billion with Denso and another major supplier, Aisin Seiki, to establish TRI-AD, a senior research and development company at Toyota Research Institute, which is reported to hold 90% of the shares, while Denso and Aisin Seiki each hold 5%.
During the same period, in order to accelerate the more advanced, more complex and larger-scale research and development of various on-board systems such as automatic driving systems, Denso announced that based on the market price, it will acquire an additional 4.5% stake in Renesas Electronics for 800 million US dollars, and the equity ratio will increase from 0.5% to 5%, Renesas is mainly for automotive micro-control, and has formed an automotive semiconductor system solution from L2, L3 to L4 and L5, fully supporting the layout of ADAS to automatic driving.
In November 2018, Denso injected capital into Infineon to accelerate the development of next-generation automotive system technologies such as autonomous driving, and through the bond of capital, the two companies have been working together for more than 10 years to further strengthen the partnership.
More critically, in June 2018, Toyota and Denso (which is reported to hold a 24% stake in Denso) agreed to begin considering integrating Toyota and Denso's core electronic components business within Denso. At that time, toyota's advanced development and mass production of electronic components, as well as the production of such parts, were carried out by Toyota and Denso, and according to the considerations of the new agreement, the focus was on consolidating the mass production development and production within Denso, so as to establish a rapid and competitive development and production structure, thereby enhancing the overall competitiveness.
Toyota's move from advanced electronics development to Denso is that in July 2019, Toyota and Denso announced that they will establish a joint venture to develop semiconductor components such as next-generation chips for future connected cars and autonomous vehicles. Under the agreement, Denso holds a 51% stake in the joint venture, while Toyota holds the remaining 49% stake, which is scheduled to be formally established in April 2020, but there is no news of the joint venture being updated.
Looking at the industry events at that time, in April 2019, at Tesla's "Autonomy Day" event, Tesla released its self-developed autopilot chip, which CEO Elon Musk called "the best chip in the world", which can be said to accelerate the inner volume of the car factory's "core building". Therefore, as soon as the news of toyota denso joint venture was announced at that time, there were endless reports about Toyota and Denso "core-making" and there was a lot of controversy, because making chips was originally a time-consuming, laborious, costly, and uneven road.
But "this time, another time", after experiencing this long cycle of car core lack, recognizing the large demand for chips in the future automotive industry, and the dividends brought by Tesla's self-developed chips, car factories and suppliers "core- making" not only lacked a lot of controversy, but also became a future trend, Ford, Volkswagen, Hyundai and more and more car companies released layout plans in the chip field.
What do you think of DENSO's stake in JASM?
Regarding the stake in JASM, Denso President and CEO Koji Arima said, "With the development of mobility technologies such as autonomous driving and electrification, semiconductors are becoming more and more important in the automotive industry. Through this cooperation, we will contribute to the medium- and long-term stable supply of semiconductors and thus to the automotive industry. ”
In this regard, an industry veteran told Jiwei Network that from the perspective of Denso's equity in JASM, this proportion is also roughly in line with the proportion of automotive electronics in wafer production capacity, and after experiencing the heavy blow caused by the lack of core in the car in 2021, auto suppliers naturally hope that the production capacity will be more guaranteed. Moreover, for TSMC, the joint venture factory can also reduce its own capital expenditure and reduce capital pressure, on the other hand, it binds customers, and has a certain bottom for future capacity utilization. At the same time, he also pointed out that chips require economies of scale, although the value of the car is high, but for a single supplier, the annual shipment scale is still limited, and the initial economic cost of investment and return is still high.
Of course, Denso's "core- manufacturing" is not accidental, from its official announcement with Toyota to establish a joint venture company, the development of next-generation chips and other semiconductor components can be seen that in the case that the joint venture between the two sides has not yet made progress, the investment in JASM can be seen as a continuation of Denso's previous strategy in the field of electrification and automatic driving, and perhaps the follow-up will see that Denso and Toyota will also adjust the structure and business, which needs to wait for time to give us the answer.
However, the author also believes that Denso's "core-making" journey may not be the general trend of automotive suppliers. At the end of January 2022, Continental decided not to produce semiconductors on its own. Automobilwoche, a sister publication of Automotive News Europe, quoted Gilles Mabire, chief technology officer of Continental's automotive subgroup, as saying: "We studied this, but ultimately decided to give up. ”
As Gilles Mabire puts it, chips are in short supply everywhere, and the semiconductor technology of each component varies. You can't solve this problem by making in-house in a single area. Experts are needed in this area, and the automotive industry itself is too small to be up to the task. This is the reality and choice that most automotive suppliers as well as automakers face.
(Proofreading/Holly)