ICT

Chip Shortages Will Drive 50% of the Top 10 Automotive OEMs to Design Their Own Chips by 2025

Updated:2021/12/9 13:17

Automakers and Tier 1 Suppliers Desire Greater Control Over Their Chip Supply

By 2025, chip shortages and trends such as electrification and autonomy will drive 50% of the top 10 automotive original equipment manufacturers (OEMs) to design their own chips, according to Gartner, Inc. As a result, it will give them control over their product roadmap and supply chains.

“Automotive semiconductor supply chains are complex,” said Gaurav Gupta, research vice president at Gartner. “In most cases, chip makers are traditionally Tier 3 or Tier 4 suppliers to automakers, which means it usually takes a while until they adapt to the changes affecting automotive market demand. This lack of visibility in the supply chain has increased automotive OEMs desire to have greater control over their semiconductor supply.”

In addition, the on-going chip shortage is primarily with mature semiconductor technology node devices that are fabricated on smaller 8-inch wafers, where capacity expansion is difficult. “The fact that the automotive industry has been conservative in qualifying older devices on larger wafer sizes has also hurt them and will likely motivate them to take chip design in-house,” said Gupta.

This model of bringing chip design in-house, or popularly known as ‘OEM-Foundry-Direct’, isn’t unique to the automotive industry and will intensify among tech companies as some changes are happening in the semiconductor market. Semiconductor chip foundries, such as TSMC and Samsung, have provided access to cutting-edge manufacturing processes, and other semiconductor vendors have given access to advanced intellectual property that makes custom chip design relatively easy.

“We also anticipate that the lessons learned from the microchip shortage will further drive automakers to become tech companies,” said Gupta.

Gartner also predicts that by 2025, the average sale price of new vehicles will exceed $50,000 in the U.S. and Germany, leading to greater repair and upfit of older vehicles. “This price acceleration will likely shrink the overall number of sales of vehicles and increase the market for parts and upgrades as people seek to keep existing vehicles on the road longer,” said Mike Ramsey, research vice president at Gartner.

Gartner analysts anticipate that the market for new vehicles will remain flat or even decline in the face of rising prices. Meanwhile, automakers will push new services and even upgrades of equipment and computers to extend the lives of existing vehicles.

 Source:C114
For press release services, please email us at english@c114.net.cn.

Related News

E-Mail:english@c114.net.cn

Copyright© 2014 C114 All rights reserved.
ICP12002291-4