In the first part of this double feature, we looked at the automotive industry’s transition toward a mobility ecosystem and the shifting business model perspective from selling vehicles to miles. At the core of these changing dynamics are four trends represented by the acronym ACES: Autonomous, Connected, Electric, and Shared mobility. Each of these trends is largely enabled by microelectronics through computer processors, sensor units, and communication architectures. Part 2 of this series explores the business opportunities at the transition from automotive to mobility, and the specific role SEMI can play as a natural bridge between the two ecosystems.
Electronics and Software as Drivers for Automotive Innovation
The ACES trends represent an acceleration of the shift in automotive from the industry’s traditionally strong focus on mechanics and hardware toward electronics and software. This transition to electronics and software as drivers for automotive innovation already started in the 1970s with electronic fuel injection, anti-lock brakes, trip computers, and many other attributes that are now considered standard features. As a result, there are now hardly any automotive systems that are not computer-controlled. A vehicle without power windows and locks, electronic climate control, or MEMS-reliant airbags are basically unimaginable in many markets.
As shown in the graphic depicting the electronics share of total vehicle cost, the numbers paint a clear picture of the continued growth of electronics over time, with a 44% share today expected to grow to 50% by 2030. McKinsey & Company estimates the automotive software and electrical/electronic (E/E) components markets combined will grow at a 7% CAGR from USD 238 billion in 2020 to US$469 billion by 2030.
The assumption of continued and sustained growth presents a promising outlook for semiconductor and sensor content in vehicles over the next decade, which is particularly strong in the electrification space. Hybrid electric vehicles (HEVs) already contain $900 worth of semiconductor content, and battery-based electric vehicles (EVs) contain $1,000 worth of semiconductors – much higher than the average of approximately $450 of content in conventional vehicles. Other business opportunities in the mid-term (3-5 years) include software, battery technology, infrastructure (charging stations, other hardware components, etc.), as well as vehicle-to-vehicle (V2V) and vehicle-to-environment (V2X) communication. These technologies also demonstrate how the industry’s business focus is expanding beyond the confinement of an individual vehicle to increasingly contemplating the evolving ecosystem around it, resulting in real mobility solutions.
Image credit: Continental AG
This creates significant opportunities for a large number of SEMI members in the semiconductors and sensors business by connecting them with new customers and partners in the automotive and mobility supply chains, primarily vehicle manufacturers and Tier 1 suppliers, and together realizing new business in new automotive applications such as:
- Autonomy, including ADAS (GPUs, LiDAR, radar, camera, accelerometers...)
- Connectivity (link to outside infrastructure and in-cabin devices, roadside units...)
- Electrification (power electronics, battery monitoring, H2 detection in fuel-cell...)
- Sharing (customizable vehicle interior, trackable mobility devices such as scooters...)
- In-cabin experience (media systems, displays, VR/AR, occupant detection...)
- Vehicle architecture (flex-ray, automotive ethernet, diagnostics, smart parts...)
- Safety and security (HW/SW firewall, parts authentication, upgradability...)
In these partnerships, the vehicle manufacturers and component suppliers clearly benefit from leveraging semiconductor capabilities including:
- Device and system reliability/robustness/quality (“Zero Defect”), which creates opportunities for new SEMI Standards (e.g. wafer-to-device/system traceability)
- New design architectures for added functionality, safety and security
- New packaging solutions (automotive OEMs are already participating in the Heterogeneous Integration Roadmap, seeking to collaborate with device manufactures and Original Semiconductor Assembly & Test (OSAT) companies to reduce costs and differentiate on automotive-grade solutions
- Sensors and imaging (cameras)
SEMI Smart Mobility Initiative – Connecting Mobility and Electronics
SEMI launched its Smart Mobility Initiative in 2018 based on the mandate of providing “SEMI members with access to new business opportunities and collaborative platforms in the automotive electronics supply chain.” The initiative is currently focused on synchronizing the automotive and microelectronics supply chains for automotive electronics innovation – in particular semiconductor devices, sensors, and related products manufactured for this space and sold to vehicle OEMs and Tier 1s. To facilitate closer dialogue among stakeholders from this combined ecosystem, SEMI formed the Global Automotive Advisory Council (GAAC) which now has five regional chapters and represents dozens of companies. Collectively, GAAC members discuss and act on a wide range of topics, from Silicon Carbide (SiC) standardization to new design architectures and closing the OEM requirement gap.
While continuing to build on the strong automotive foundation, SEMI’s Smart Mobility Initiative is now expanding its reach and scope of activities to broader mobility themes, such as infrastructure and battery technology and Smart City, to infuse SEMI member communities and the GAAC with new stakeholders and new ideas. These are exciting times!
Please contact Bettina Weiss, Chief of Staff at SEMI, at email@example.com for further information about SEMI’s Smart Mobility Initiative, the Global Automotive Advisory Council, and how SEMI can help your organization navigate electronics in the automotive industry to drive innovation in the mobility space.
 see graphic, created with data from NXP / Freescale
 Source: McKinsey & Company, 2019
Bettina Weiss is Chief of Staff and Global Smart Mobility Lead at SEMI. Sven Beiker is Smart Mobility Consultant at SEMI.