Automotive trends for 2025
The automotive industry was perhaps the saving grace of the European semiconductor industry in 2023, but reality has hit hard in 2024.
The European Commission will start talks in the New Year on the future of the industry in the region as sales of electric vehicles stall. This is not just a European problem with Volkswagen and Stellantis, as Honda and Nissan merge, and Ford and General Motors struggle.
However there are huge opportunities for the industry in the shift to software-defined vehicles and autonomous driving. These shifts are beneficial to ARM, STMicroelectronics, NXP Semiconductors and Infineon Technologies.
“With the rise of electric vehicles and innovative ADAS, safety, and infotainment systems — many driven by AI, the automotive industry is experiencing massive changes,” said Wayne Lyons, Senior Director of Marketing, Automotive Segment, AMD.
Many of those trends will be on display at the Consumer Electronics Show next week in Las Vegas. Honda will be showing its Series 0 platform that will be used for its SAE Level 4 driverless car in 2026.
“It’s no longer the engine or infotainment that drives car sales. Most consumers today are much more concerned with what the in-cabin experience is going to be, than the size and power of the engine. It is the fully integrated In-Vehicle Experience (IVX) – from infotainment, cluster, and safety to gaming, connectivity, and personal digital assistants – that will define the car for the consumer,” said Amey Deosthali, senior director, Embedded Product Marketing at AMD.
“IVX goes far beyond simple driver experience. There is a growing demand for IVX to expand throughout the entire vehicle to include all passengers. Some of the premium experiences under development include a display for each passenger, Internet to allow passengers to surf the Web, streaming video and console-class gaming requiring high-resolution graphics, and an immersive audio experience for each seat.”
Personalising the IVX will drive the need for AI agents, which is one reason why EDA tool vendor Synopsys is working with Sima.ai. Across in-vehicle infotainment (IVI) and advanced driver assistance systems (ADAS), there have been various OEM innovations in the past year, with AI models being integrated into these systems. For example, Mercedes-Benz is using Chat-GPT for intelligent virtual assistants within its vehicles. 94 percent of global automakers are using ARM-based technology for automotive applications, alongside the top 15 automotive semiconductor suppliers in the world adopting ARM technologies in their silicon.
“Today, the chatbots and digital assistants that are being developed to enhance the driving experience are built on foundational technology such as ChatGPT and Microsoft Copilot. However, the consumer preference is towards a more personalized experience inside the vehicle,” said Amey Deosthali, senior director, Embedded Product Marketing, AMD
“Unique features like adjusting the driver’s calendar based on commute time, recommending restaurants based on the driver’s history, and playing music aligned to the drivers’ tastes will drive the need for AI agents. These In-vehicle localized AI agents will make the vehicle an extension of the driver’s phone or computer, enhancing convenience and personalized experiences that seamlessly integrate everyday life into vehicle operations. Hybrid AI architectures built on CPU, GPU, and NPU, such as the ones offered within Ryzen Embedded processors, are required to enable AI-agent-based solutions and deliver the best in-vehicle (IVX) experiences for consumers.”
Many semiconductor makers, from Nvidia and AMD to ST and NXP are aiming at the centralized computing that will come to dominate vehicle architecture.
“Size, cost, and power constraints, along with the desire to embrace the era of Software Defined Vehicle by enabling OTA updates, are driving automotive design to use more centralized computing architectures to consolidate ADAS and IVI functions and reduce complexity,” said Lyons at AMD.
“Rather than have many intelligent subsystems, automotive OEMs are moving to designs where intelligence is split between the edge and hub/domain/zonal controllers. For example, rather than having an MCU for each sensor, centralizing the compute in a hub, domain, or zone can consolidate data collection. This approach helps reduce wiring complexity, cost, and power consumption.”
ARM and Nuro are integrating the Automotive Enhanced (AE) cores for more intelligent and advanced autonomous experiences in cars, while Nvidia will bring the ARM Neoverse-V3AE core to its upcoming DRIVE Thor for next-generation software-defined vehicles (SDVs). Several leading OEMs have already announced plans to adopt the chipset for their automotive solutions, including BYD, Nuro, XPENG, Volvo and Zeekr.
This extends to the sensor systems.
“Advanced sensors will make a significant impact on ADAS solutions by providing more accurate data and improving safety maneuvers, from lane-keep-assist to auto parking and braking,” added Lyons.
“As the number and different types of sensors within the vehicle, such as cameras, radar and LiDAR, continues to rise each year, pioneering companies like Waymo have already logged millions of autonomous miles in vehicles that leverage all three technologies. In addition, emerging EV companies in China are leveraging advanced sensors like LiDAR to differentiate their safety offering in the fiercely competitive EV market. To achieve the real-time performance required so the various sensor data can be used in real-world driving situations, developers will need a flexible architecture that can provide the necessary performance with functional safety, all on a single chip.”
Whether this central compute is a monolithic chip such as Nvidia Thor, which will be detailed in 2025, it will also be constructed from chiplets. This technology will be further developed through 2025, with the end results showing up in the following years.
There will be continued demand for legacy process technology, with the construction and facilitation of the ESMC fab in Dresden progressing through 2025.
Displays will also be a key driver of automotive technologies in 2025, from microLEDs to the production of holographic windscreens and smart glass.
On top of all the 2025 automotive trends there will be the impact of tariffs set by the US and Europe. With the new administration of Donald Trump in January, the trade war with China will have a major impact on the automotive industry in 2025.
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