According to Yole, electrification and advanced driver assistance systems (ADAS) will drive the semiconductor chip market to grow from $44.1 billion in 2021 to $80.7 billion in 2027, with a compound annual growth rate (CAGR) of 11.1%.
Electrification will require new substrates such as SiC, with SiC wafer demand projected to reach 1.1 million wafers by 2027. ADAS will utilize microcontroller units (MCUs) with cutting-edge silicon technology nodes as small as 16nm/10nm. Level 4 and Level 5 vehicle autonomy will drive demand for dynamic random-access memory (DRAM) and computing power.
SiC manufacturers are flocking to the market.
First, let's look at SiC. According to Yole's compound semiconductor team, the SiC device market will reach $6.3 billion by 2027. With the development of electric vehicles over the past few years, longer driving range has become one of the main customer demands. However, this, in turn, has created a demand for fast DC charging to reduce waiting time at charging stations. 800V EVs are a solution to meet this demand and have begun to penetrate the market since 2021.
Poshun Chiu, Compound Semiconductor and Emerging Materials Technology and Market Analyst at Yole, commented: “SiC is considered a driving force for good efficiency, and the supply of 1200V devices is feasible. With the arrival of more 800V EVs, SiC is expected to grow rapidly. At the same time, charging infrastructure and photovoltaics are two markets supporting the electric vehicle trend. More chargers are needed to support the increasing number of electric vehicles, and renewable energy shares the same zero CO2 emission target as electric vehicles. These are markets where SiC can gain more momentum.”
In the past two years, global automakers have suffered from a lack of chips.
Don't underestimate chips the size of a fingernail. Although some cost only a few dollars, sometimes the absence of even a single chip can prevent the production of cars worth hundreds of thousands of dollars. According to incomplete statistics, due to chip shortages, the global automotive market reduced production by 10.5 million vehicles in 2021, almost one-eighth of sales.
The rapid development of intelligent vehicles in China has brought new opportunities to the automotive industry chain, but it has also highlighted the shortage of automotive chips. "A three-year chip shortage reduced global car production by approximately 15 million vehicles, with China accounting for over 2 million of that reduction. This demonstrates the profound impact of automotive chips on the industry," said Zhang Yongwei, Vice Chairman and Secretary-General of the China Electric Vehicle 100 Forum, at the Global Intelligent Vehicle Industry Summit held on December 16th. He added that while the shortage of automotive chips has eased somewhat, this relatively tight supply situation is expected to continue for a considerable period.
As the penetration rate of smart cars continues to rise, the proportion of chips in the whole vehicle is also increasing, and the demand for automotive chips is also experiencing explosive growth.
China's automotive chip demand is projected to reach 100-120 billion units per year by 2030.
No one expected that a tiny chip would become a "black swan" event hindering the development of the global automotive industry.
Chips are so important to cars, so how many chips are in a car?
From a technical perspective, traditional automobiles require at least 40 different types of chips, with a single vehicle using a total of 500-600 chips. These mainly include MCUs, power semiconductors, sensors, and various simulators. Among these, MCU chips are the most important, with a traditional automobile requiring more than 70 MCU chips.
The century-old automotive industry is undergoing a period of great transformation, with the shift towards electrification and intelligentization being an inevitable trend. According to data released by HiSilicon at the 2021 China Automotive Semiconductor Industry Conference, the total market value of automotive semiconductors is expected to approach US$100 billion by 2027. As a major automobile manufacturing country, my country also has a strong demand for automotive semiconductors, with the market value projected to reach US$13.7 billion by 2025.
Specifically, in terms of electrification, the biggest beneficiaries of vehicle electrification are power semiconductors, especially IGBTs. It is estimated that by 2025, the global market size of IGBTs for new energy vehicles will approach $4 billion, with China reaching $2.2 billion.
In terms of intelligence, the current automotive intelligence is in the 0-1 stage. Autonomous driving, intelligent cockpits and other technologies are increasing the demand for automotive sensing devices, computing power and data volume. There is broad growth potential for automotive control chips, memory chips, analog chips and sensors.
Compared to traditional cars, new energy vehicles are the biggest users of chips. The number of chips used in a single new energy vehicle has increased to 1,000 to 1,200, and the number of chip types has also increased from 40 to 150. Some high-performance models even use up to 2,000 chips.
Some people may not understand why a car needs so many chips. That's because different chips are needed to perform different functions. From small components like the Tire Pressure Monitoring System (TMPS) and cameras to larger components like the vehicle controller and autonomous driving domain controller, all of these components rely on various types of chips.
To put it simply, only the very earliest purely mechanical cars produced did not require chips!
The domestic automotive chip industry is booming, with industry standards and certifications gradually being improved. At the 2022 Automotive Chip Technology Innovation and Application Forum, Zou Guangcai, Deputy Secretary-General of the China Automotive Chip Industry Innovation Strategic Alliance, stated that the domestic automotive chip industry is currently in its early stages, with a rapid increase in the number of companies, but most automotive chip products have only obtained preliminary automotive-grade certification. He suggested that companies leverage their unique product features and technological advantages to avoid falling into disorderly competition in the low-end market. Meanwhile, national standards for automotive chips are expected to be gradually implemented, developed, and applied during the 14th Five-Year Plan period.
Automotive chip integration
"Generally speaking, China's automotive chip industry is still in its early stages. There are many companies entering this industry, but the types and quantities of products offered by each company are relatively limited," Zou Guangcai pointed out. He added that most domestic automotive-grade products have only passed preliminary certification, and there is still a long way to go before they are put into vehicles. He believes that automotive chip products will definitely be launched in large quantities in the next few years, and suggested that companies should highlight their product features and technological advantages in their product layout to avoid falling into disorderly competition in low-end products.
Many people who wanted to buy a car recently have encountered delayed delivery issues. The reason why 4S stores are extending delivery times is mainly due to the current global shortage of automotive chips. Those unfamiliar with automotive chips may not understand what this means, so let's take a look at what automotive chips actually are.
"Chip" refers to semiconductor components, also known as integrated circuits. If a mobile phone chip is the "brain" of the phone, then a car chip is the brain of the car. Automotive chips can be mainly divided into three categories: "functional chips," "power semiconductors," and "sensors."
