They are called Infineon, NXP, Renesas Electronics, Qualcomm, Nvidia, STMicroelectronics, SK Hynix, Micron or even Intel and Samsung. With the exception of the last two, these companies are often overlooked. In the shadows, they nevertheless achieve billions of euros in turnover. The semiconductors they produce equip our mobile phones, our computers, our washing machines, our fridges, our coffee makers and more and more… our cars. According to the automotive industry, the number of electronic chips integrated into our vehicles doubled between 2017 and 2021. And it’s not over! Last January, the Consumer Electronic Show (CES) in Las Vegas, which gives pride of place to consumer electronics innovations, welcomed a record number of manufacturers. To the point of becoming “perhaps the biggest auto show in the world”, rejoiced Gary Shapiro, the person in charge of this high mass.
Driven by the electrification of fleets, chips, microprocessors and other embedded software have taken a strategic place in the automotive industry. Their shortage for two years weighs heavily on the rates of assembly lines. Worldwide, this semiconductor crisis, following the Covid pandemic and the strong demand linked to the deployment of 5G, prevented the production of 11 million vehicles in 2021 – out of a total of around 95 million – , including more than 3 million in Europe. Last year, 4.5 million cars were missing. “The trend is downward. It is estimated that the overall impact will amount, in 2023, to 2.7 million units”, details Marc Mortureux, the general manager of the Automotive Platform (PFA), a group which represents 4,000 companies in the auto industry.
“The importance of silicon, the essential component of semiconductors, in a car has increased considerably, explains David Gyarmathy, senior director sales at Qualcomm France. Today, motorists are no longer as interested in the power and torque of the engine but the experience and services associated with driving. This requires high-performance semiconductors designed for the road.” Without them, none of the innovations that seem commonplace today when you switch on the ignition would not have been possible.
Target “zero deaths” by 2050
Since the invention of ABS and ESP, braking control systems sometimes work in tandem with more than a hundred different functions on board the same vehicle. Assistance in overtaking, maintaining on an axis, respecting a safety distance or the automatic tensioning of seat belts in the event of danger must, likewise, all come from chips. Ditto for driving delegation, the final stage of this automation, which offers the driver the possibility of literally entrusting the steering wheel to an on-board computer. Without fearing for his life? After Volvo, Mercedes is committed to it: the German firm has set a goal of “zero deaths” in its cars by 2050.
The keystone of safe and comfortable driving, electronic components are not only crucial in the commercial battle between manufacturers: they also constitute a formidable source of growth for the entire sector, beyond the mere sale of vehicle and spare parts. According to a study by McKinsey, published in October 2022, “the total value created by the use of connected cars across the entire value chain – from technology production to services – could reach more than 550 billion by 2030, up from about $64 billion in 2020, an increase of 24% per year.” A windfall from which chipmakers are already taking full advantage.
“We achieved $700 million in revenue with silicon carbide for automotive and industrial use in 2022, said Jean-Marc Chéry, CEO of STMicroelectronics during the presentation of the annual results at the end of January. forecast is over $1 billion in 2023. We ended the year with 115 projects awarded. About 60% of these projects are for automotive customers.” Among them, Tesla, BMW or Hyundai.
To seal their idyll, and secure supplies, manufacturers and chipmakers have multiplied industrial mergers in recent months. Last November, Renault strengthened its ties with Qualcomm. A cooperation that began in 2018 on the multimedia system of the electric Mégane. From now on, the two groups work together on the basis of the digital chassis developed by the American. In Germany, the automotive supplier ZF, which has a turnover of 38 billion euros and employs 157,000 people worldwide, is investing in an electronic chip factory in association with another American manufacturer, Wolfspeed. Subsidized by the European Union within the framework of the PIIEC plan (Important Project of Common European Interest), this unit will be erected on a former coal mine site for an amount which could exceed, according to the German press, 2 billion euros. euros. Bosch, the world’s leading automotive supplier, has had its own chip factory in Dresden since 2021. As for STMicroelectronics, the Franco-Italian group plans to commission a new factory on the outskirts of Grenoble, as an extension of its current site, by 2026. We are talking here about 5.7 billion euros in investment, and 1,000 jobs created.
Across the Atlantic, this waltz of billions makes you even more dizzy. In December, the Taiwanese TSMC, the world’s number one chip company, announced that it was increasing its investments in the United States to $40 billion by building two factories in Arizona. Its American rival Micron provides an identical sum. Intel will put 20 billion on the table. And Samsung says it is ready to build no fewer than ten semiconductor factories in Texas over the next two decades. Wherever you drive, the chip is advancing by leaps and bounds.