Philippe Prats, Vice President, Automotive Segment Marketing and Applications, Sales & Marketing STMicroelectronics
The automotive industry is transforming through electrification and digitalization, with semiconductor companies at the forefront. This shift presents significant growth opportunities and challenges, necessitating disruptive technologies and shorter development cycles. Strengthening partnerships among semiconductor manufacturers, Tier-1 suppliers, and carmakers is crucial to navigate these complexities and drive the industry towards an electrified, automated, and connected future.
The automotive industry is undergoing a profound transformation driven by the megatrends of electrification and digitalization. Semiconductor companies like STMicroelectronics are at the center of this transformation, with electronics playing an increasing role in shaping the future of connected, automated electric vehicles (EVs).
Electrification and digitalization are redefining car architectures and key subsystems. The development of new electrical and electronic (E/E) systems and Software Defined Vehicles (SDVs) presents an exciting market with tremendous growth opportunities for semiconductor manufacturers. A notable indicator of the growth potential is the increasing value of semiconductors in vehicles. Current forecasts see the average semiconductor value per vehicle reaching 800 USD this year, with the 1000-dollar mark on the horizon. However, there are significant challenges, as semiconductor companies must identify and deliver the right disruptive technologies that will help shape the next generation of vehicles, while meeting the increasingly shorter development times required by carmakers for their vehicle platforms.
Faced with the opportunities and challenges of a growing and evolving market, strengthening partnerships between semiconductor manufacturers, automotive suppliers, cloud providers, and car makers is more important than ever.
Developing the right products by understanding the system
Increasingly, differentiation in the automotive market hinges on digital advancements. Consumers prioritize software-driven features that mirror the broader trend of integrating smartphone-like capabilities into vehicles. To meet these expectations, connected cars must consistently interact with digital ecosystems, and offer immediate access to both onboard and offboard data. This is the promise of the Software Defined Vehicle (SDV), focusing on a feature-rich and -upgradable approach, to provide continuous end-customer value through software updates, ensuring the vehicle remains desirable and valuable throughout its entire lifespan: software increasingly delivers customer value.
Decoupling software from hardware is an inevitable path to cope with the swift and continuous implementation of new functions which not aligned with the long development cycles of the vehicle and its hardware. The electric/electronic (E/E) and software architecture is crucial in enabling this ability. It requires a future-proof hardware foundation, making it accessible through well-defined and stable interfaces. Semiconductor companies are at the forefront of this technology foundation by providing innovative, performant, and reliable solutions that enable the decoupling of hardware and software. This decoupling relies on simplifying overall system complexity. To achieve this, semiconductor companies are investing to gain a deeper understanding of the systems their products will operate in and how they contribute to system architecture and overall cost efficiency.
Semiconductor technologies play a crucial role in supporting the complex functions of Software-Defined Vehicles across all layers of the E/E architecture. This involves developing scalable families of microcontrollers (MCUs) and microprocessors (MPUs) to enable the transformation to zonal and central computing architectures. More than MCUs and MPUs products, the objective is to deliver computing platforms endorsed by an eco-system of software, engineering tools and cloud partners. Semiconductor companies need to anticipate such developments to facilitate the integration of software components in a reliable and powerful processing environment that seamlessly scales up and down. This allows multiple functions to coexist with freedom from interference. Stringent requirements for power efficiency and functional safety also play a critical role.
Integrating advanced electronic systems, ensuring reliability, and maintaining safety standards have become increasingly complex. This poses a critical challenge in managing safe and reliable power supply and distribution. To solve this, the automotive industry is on the path to adopting smart switches for power distribution, which offer significant improvements over traditional melting fuses and mechanical relays. This change is pivotal for enhancing vehicle safety and efficiency, particularly for safety-critical systems like AD/ADAS functionality. Semiconductor switches provide higher robustness, and enhanced monitoring capabilities, enabling controlled load management with real-time and accurate monitoring. Smart fuses provide a typical example of how semiconductor companies can bring innovative technologies to address the SDV hardware foundation, in this case at the roots of the E/E architecture with a tremendous positive impact at system level. This transition towards smart fuses supports a comprehensive and intelligent energy management system, optimizing energy use, enabling predictive maintenance algorithms, and reducing vehicle weight and environmental impact through more cost-effective wire harness implementations.
Navigating Complexity and Shorter Development Times
Semiconductor companies must increase system knowledge to develop the right products to address the complex challenges and opportunities created by the evolution of the automotive market. At the same time, they are also faced with the acceleration of development cycles, a trend which is reshaping the industry. New EV startups and companies from the consumer electronics sector, are disrupting the automotive industry by quickly bringing new models and features to market. Consumers want the latest technology and seek upgradable features in affordable cars, compelling automakers to adopt shorter cycles to meet evolving customer needs for novelty and freshness. Meeting this demand is further complicated by the need to manage diverse manufacturing processes and supply chain fluctuations, with semiconductor production times ranging from four to six months. These accelerated development cycles require closer collaboration, prompting automakers to increasingly partner with technology companies, suppliers, and startups to leverage expertise and speed up the development process.
End-to-end innovation and early-stage engagements are therefore fundamental to help develop the right technologies in partnership with customers. To take advantage of the rapidly growing and advancing automotive market, particularly in China, ST has set up local competence and application centers to better engage with local customers. ST has also decided to establish production activities in China for technologies that support the electrification of the automotive industry. Silicon carbide is essential for energy-efficient power semiconductors, which are critical in electric and hybrid vehicles. Local production, achieved through partnership, offers many benefits: it helps ST respond to the structural change we are seeing in the industry, shortens supply chains, and provides a more flexible manufacturing footprint to quickly adapt to market demands. This localized approach not only enhances market responsiveness but also strengthens ST’s position in one of the world’s largest and most dynamic automotive markets.
Conclusion
While the automotive market presents significant growth opportunities for semiconductor companies, it also brings remarkable challenges in developing new products and disruptive technologies demanded by carmakers. Success hinges on faster innovation and agile, efficient production, requiring substantial R&D efforts and strengthened partnerships with automotive suppliers, technology partners and carmakers. Collaboration among automotive stakeholders is essential to achieve a comprehensive understanding of market challenges and the complex software-centric ecosystem. It is also fundamental to accelerating the innovation process and enabling the delivery of solutions that will propel the automotive industry towards an electrified, automated, connected, and sustainable future.
