The automotive industry’s demand for semiconductors will increase massively in the next few years. The reasons are electrification, the further development of autonomous driving and the more intensive integration of cars into data networks. Roland Berger’s analysts expect the value of semiconductors installed per car to more than double in the next few years – from $3,000 in a premium vehicle with a combustion engine in 2019 to over $7,000 in a semi-autonomous electric car in 2025.
Paradoxical as it may seem, this increase only puts the car industry in even more of a predicament with regard to the supply of chips. Because in terms of unit numbers, the car industry is lagging far behind competing customer industries. For example, the share of smartphones in the semiconductor market is 17 times higher than that of car manufacturers. The use of highly complex SOCs in the central computer platforms of cars could even reduce the number of units compared to the current practice of decentralised ECUs. This trend has other implications as well: While it reduces the complexity of procurement processes, it exacerbates carmakers’ dependence on their chip suppliers.
In any case, experts expect the chip squeeze to last at least until the end of 2021, possibly even longer. True, TSMC is expected to significantly increase its wafer capacity in H2 2021; Samsung will also significantly increase its output in Q4. However, the TSMC fab in Arizona is unlikely to come on stream before 2024, and Intel will probably not ramp up its 7nm production until late 2022, according to the Roland Berger analysis. In addition, another bottleneck is already emerging, for example among suppliers to the semiconductor industry. And it is not only the car industry that has an increasing demand for silicon components; consumer electronics (Playstation, graphics cards) are also fighting for every chip they can get from the manufacturers. Business is booming for GPU manufacturers, for example, and Apple is likely to release more high-volume orders for its new CPU chip to contract manufacturers around mid-year, further intensifying the battle for manufacturing capacity.
In view of this unfortunate situation, Roland Berger has drawn up a three-stage recommendation for chip procurers in the automotive industry: In the short term (6 – 12 months), only damage minimisation will probably help – i.e. day-to-day measures aimed at ensuring that at least the production of cars does not have to be stopped by creating maximum transparency in the supply chain. In the medium term, a programme must be developed to mitigate the risks. Building blocks for such programmes are, for example, the preferential use of standard components, the build-up of larger inventories and the establishment of second-source suppliers. In the long term – i.e. on a 3 to 10-year horizon – the automotive industry must already take the chip supply situation aspect into account in its electronics designs and also follow geopolitical developments more intensively, the experts advise.
More information: https://www.rolandberger.com/de/?country=WLD