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Autonomous, Electric Vehicles Drive Semiconductor Development

TAM expansion driven by electrification and autonomous driving

Electrification of automobiles is an unstoppable trend. The semiconductor industry is well positioned to support this transition and benefit from a significant increase in total addressable market (TAM). A typical electric vehicle (EV) has twice as much semi content compared to an internal combustion engine car, at around $800.1 A large portion of the incremental content comes from power semiconductors. BOM (bill of materials) for a full self-driving car can be even higher by using silicon for self-driving computers. Rapid EV adoption is expected to drive the power semiconductor market to grow from $7bn in 2020 to $24bn by 2030.2 Automotive microcontroller (MCU) market is projected to reach over $12bn by 2025, from $7.6bn in 2021.3 Key suppliers include NXP, Renesas, Infineon and Texas Instrument.

The development of higher-level self-driving vehicles has also driven the demand for high-performance systems-on-a-chip (SoC) to support new architectures and process input from an array of sensors. The SoC enables autonomous vehicles’ perception, planning, control, and more. Mobileye estimates the TAM for ADAS (Advanced driver-assistance systems) related silicon to reach $4.5-6bn in the next few years,(Mobileye 2021) and the market will be significantly larger once L4/L5 vehicle penetration moves up as ASP (average selling price) for full self-driving SoC can be $500-$1000+.4

Power Semiconductors is the key component to the electrification of automobile

IGBT (insulated-gate bipolar transistor): IGBT is a silicon-based power semiconductor which is highly adopted by EVs for its cost, stability and mature manufacturing technology. Infineon is the market leader with around 30% market share.5

SiC: Silicon Carbide is a new material used in power semiconductors for EVs. It provides higher efficiency and better performance compared to silicon-based solutions. ST Micro, Wolfspeed, Infineon and Rohm are key suppliers.

Foundry Technology Migrationto support future AD chips

Migration in semiconductor technology allows companies to design faster chips with lower power consumption and higher transistor density. This is crucial for processing and deploying complex neural networks in autonomous vehicles. AD (autonomous driving) workloads are challenging as they are compute-intensive, complex concurrencies and real-time. TSMC is leading the foundry mode migration.

Chip suppliers have an aggressive timeline with the help of foundry to achieve rapid performance improvement over the next few years. Nvidia is currently a leader in third-party autonomous driving SoC, while Tesla has the most competitive in-house designed autonomous driving SoC. Other third-party suppliers such as Mobileye (Intel) and Horizon are also ramping up product performance rapidly.

Digital Cockpit is the new standard

Tesla set the standard for digital cockpits in the industry. Automakers are transforming the cabin with an always-connected digital cockpit, enabling a better multimedia experience, smartphone-like operating system, smart navigation and more. As the level of autonomy increases in vehicles, eventually freeing the driver, the infotainment functions become more significant.

A range of chips are required to support the new digital cockpit, including 1) connectivity related chips like modem, Bluetooth, Wifi; 2) SoC to power the infotainment system; 3) other chips like power management, display driver, audio, etc. to support various hardware.

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1. Mirae Asset, 2022

2. Credit Suisse, 2021

3. IC Insights, 2021

4. Mirae Asset, 2022

5. Mirae Asset, 2022

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