Entering 2022, the global “chip shortage” has not been effectively alleviated. Power management chips (PMICs) and microcontrollers (MCUs) have significant gaps among all automotive chips. According to Infineon and NXP, the world’s two largest automotive chip makers, supply and demand for automotive chips will not be balanced until mid-2022.
The reasons for the lack of chips are apparent.
First of all, it was affected by the pandemic outbreak in 2020. The pandemic affected the production capacity of the chip front-end and had a massive impact on the packaging and testing capacity of the completed R&D process.
Second, the production capacity of automotive chips is mainly concentrated in Europe and the United States and is almost monopolized by international giants such as Renesas Electronics, Infineon, STMicroelectronics, NXP, etc. The overly concentration of chip production leads to a concentration of risks. Even just one of them met production problems, the global chip supply would be greatly impacted.
Third, because of the lower profit of automotive chips compared to the entire chip market, the proportion of automotive chips is small. But at the same time, car manufacturers worldwide are developing towards smart cars, and the overall demand for automotive chips is increasing so that each car manufacturer can get fewer chips on average.
However, under such conditions, it is an opportunity for the accelerated development of China’s chips industry.
Today, China’s chip industry is mainly focusing on production and packaging, and few companies have been involved in the design level. Even if there are designed chips, they are mainly concentrated in the middle and low-end level, and their share in the design of high-end chips is basically zero. However, more chips need to be applied in the era of new energy vehicles.
Thus, China’s already booming new energy vehicle industry has already begun to use Chinese-made chips.
For example, the delivery of Horizon Robotics’s automotive chips has reached 400,000 pieces. Among them, the models used in L2 autonomous driving include Chery Ant and 2021 Ideal ONE. Huawei and Jihu jointly developed the Jihu Alpha S Huawei HI version model equipped with ADS high-end automatic driving full-stack solution, equipped with Huawei’s automatic driving central supercomputing domain controller (ADCSC). Geely also released it last month. The first self-developed 7nm process automotive SOC “smart cockpit chip” is China’s first 7nm vehicle-grade cockpit chip.
In general, although the world is still facing a shortage of chips in 2022, China may accelerate the development of China’s chip industry due to its investment in the new energy vehicle industry, becoming another key country outside the Europe and United States that can greatly affects chip production capacity.