The rise in the number of automobiles is a powerful driver of the semiconductor industry's growth, especially given the demand for smart electric vehicles, industry participants said at an event in China.
According to Wang Lijian, director of technology at Shanghai Juyue Inspection Technology, the use of chips in smart vehicles has already increased significantly since 2018 and will grow by 26.34% from 2023 to 2025 in smart electric vehicles. Citing data from the China Association of Automobile Manufacturers (CAAM) and consultancy EqualOcean, Lijian noted that the average number of chips per vehicle for smart electric vehicles is much higher than for conventional cars. For example, in 2018 there were about 914 chips in electric cars, compared to 638 chips in cars with ICE .
This year, a smart electric car is predicted to have an average of 1,640 chips, compared to 1,027 in a regular car. Electric vehicles are expected to be equipped with 1,843 chips in 2024, with that number rising to 2,072 chips in 2025. This is an increase of 432 chips per vehicle. Meanwhile, from this year to 2025, in cars with ICE could grow by 21% or 216 chips, as noted at the semiconductor forum of the 23rd China International Industrial Fair.
“Compared with consumer and industrial grade chips, automotive grade chips have higher requirements in terms of expected product life and operating environment. As the supply of smart NEVs increases and there are more and more chips in each vehicle, chip verification becomes increasingly important,” adds Lijian, noting new opportunities in the value chain.
Len Qianqian, analyst at EqualOcean, noted that power management integrated circuits (PMICs), the largest segment of analog chips, have benefited from growing demand in new electric vehicles and energy storage areas. “Although the semiconductor industry is currently experiencing a downturn, PMIC companies are unlikely to be bothered by this [negative] sentiment due to its widespread use. With demand rising in new areas and downstream substitution accelerating, China's PMIC industry remains in a strong growth [position],” the analyst noted.
On Wednesday, Sinomcu, another Chinese semiconductor maker, announced the creation of a subsidiary , which will focus on demand for automotive chips.
Despite ongoing tensions in the semiconductor supply chain, many automakers are reporting improved supply conditions, easing production restrictions around the world.