Semiconductors in the Automotive Industry: A Game Changer for the Tech-First Automobile Space

Saurabh Singh September 8, 2023
Semiconductors in automotive industry: A game changer for the tech-first automobile space

In the past few years, a number of technologies have been incorporated in the automotive industry, especially for the mass production of cars, including enhanced lidar sensors and smart camera-based sensors. At the center of these innovations lies an increased dependency on semiconductors.

In the era where cars have become high-performance computers on wheels, car manufacturers are facing a new layer of complexity –  adjusting to the paradigm shift towards harnessing the computing power of semiconductors in the automotive industry.

With autonomous chips expected to create over $29 billion by 2030, as per an insight by McKinsey, the stakes are high to explore the use of semiconductor technology in automotive.

Use of semiconductor technology in automotive

In this article, we are going to make the journey easier by diving into the role of semiconductor technology in the automotive industry through the way of benefits and the changing market.

Unravel the true benefits of the semiconductor

The Benefits of Semiconductor Technology in Automotive

The growing popularity of electric vehicles and driverless vehicles have called for semiconductor technology advancements in the automotive industry, ones that would make the space smarter and energy efficient.

Benefits of Semiconductor Technology in the Automotive Industry

Improved Connectivity: As drivers, we have become acquainted with using features like route mapping and road closure using in-vehicle GPS – features that run by the integration of semiconductor technology in cars. High-grade legacy node semiconductors fine-tune preinstalled systems in the vehicle. The semiconductor is also used to process and sense key data of the vehicle’s computing system, leading to reliable, accurate, and timely control of the vehicle.

Electrifying Vehicles: Electrification introduces amazing features in the automobile sector – managing hybrid vehicles’ batteries, bettering the fuel combustion efficiency in the vehicles, and even restoring the energy in the electric vehicles from regenerative braking systems. Semiconductors in the automotive industry simplify these complex processes by managing efficiency and quick decision making.

Better Safety: One of the key selling points of autonomous driving vehicles is their braking system which works in fraction of seconds. An area where the benefits of semiconductor technology in automotive are most visible. The software powers features such as cruise control, emergency braking system, blind-spot detection systems, parking camera assist, colliding avoid sensors, etc. in a way that they respond in real-time.

Increasing Count of AVs: One of the biggest revolutions of the current time has been Autonomous Vehicles. These vehicles can move from one point to another without any human assistance in an “Autopilot Mode” through the help of an AI-based technology. In order to fine-tune this heavily sophisticated model, advanced semiconductors are being used by the automotive industry.

Advanced Driving Assistance: A number of features such as cruise control, voice control GPS navigation, active steering, and OTA updates, etc., are entirely dependent on the semiconductor technology in cars. These semiconductors function as a bridge between semiconductor software solutions for automotive and the vehicular functions of the modern-age cars.

Extended EV Range: Modern-day semiconductors deliver high efficiency by their ability to turn on and off thousands of times per second. This results in a substantial decline in the power losses leading to the batteries lasting longer and range getting extended. These semiconductors also help automotive OEMs use small batteries, enabling them in designing new car architectures through space reductions.

The one common element between all these benefits of semiconductor technology in automotive lies in working of the technology. In order to understand the depths of the use of semiconductor technology in automotive, it is critical to understand what goes into it.

Let us look into the key components of semiconductor software next.

The Key Components of Semiconductors in the Automotive Industry

Semiconductor technology advancements in the automotive sector have grown to an extent where there is a profound shortage of chips. While the shortage is mostly a supply chain challenge, the implication is clear – semiconductors are here to transform the auto space. Now for a software company to build a system that would bridge the semiconductor and the hardware (automotive vehicle), it is important to understand the basics of the technology.

Automotive semiconductor market can be easily categorized into four segments. The first one are microcontrollers used for traditional automotive features such as anti lock brakes and emissions controls, second is the wireless modem chip which connects cars with the internet. Next, there are two other categories working on the cars’ autonomous features: chips for the sensors and cameras and processing chips which act as the vehicle’s brains.

Here are the different components that come together to make the segment whole.

  • Microcontrollers: Microcontrollers or MCUs are integrated circuits which consist of a memory, CPU (Central Processing Unit), and a vast range of peripheral interfaces. They are used in the automotive applications for controlling and monitoring functions like body control, engine management, powertrain control, and the infotainment systems.
  • Digital Signal Processors: DSPs are microprocessors which are engineered for performing digital signal processing tasks. In automotive, they are used for speech recognition, image processing in ADAS systems, audio processing, and other computationally heavy activities.
  • Application-Specific Integrated Circuits: ASICs are personalized integrated circuits built for some specific automotive uses. They power high performance and establish integration capabilities for special functions such as specific vehicle control systems, image processing, and ADAS algorithms.
  • Electric Control Unit: ECUs are critical vehicle components whose functionality is controlled by automotive semiconductors. They enable real-time monitoring, precise control, and combination of multiple systems inside a vehicle by using sensor interfaces, microcontrollers, and communication protocols. This ultimately results in improving the vehicles’ safety, performance, and functionality.
  • Power Management ICs: The main task of power management integrated circuits is to control and manage vehicles’ power supply. These components make sure that effective power distribution, voltage regulation, and protection is maintained throughout the automotive systems of the electric vehicles.
  • Sensors: Automotive sensors are crucial for gathering information from a vehicle’s internal system and surroundings. These sensors vary from – position sensors, pressure sensors, gyroscopes, proximity sensors, temperature sensors, accelerometers, and more. They together gather and send information for multiple uses such as the environmental control systems, ADAS, and engine management.
  • MEMS (Micro-Electro-Mechanical Systems): The technology plays a key role in semiconductors in the automotive industry. MEMS-based semiconductors offer advanced-grade actuation and sensing capabilities to the automotive industry, which ultimately helps with improving the vehicle safety, ease, and performance. This enables intelligent systems to track and respond to a range of vehicle and environmental conditions, thus bettering the overall driving experience.

While these cover the semiconductor space on the technical side, for the technology to become aligned with the growing demand of the automotive vehicles, the role of semiconductor technology in the automotive industry would have to become investments and partnerships-driven. Here’s an overview of the collaborations happening between automotive vehicle manufacturers and semiconductors manufacturing companies.

Collaborations happening between automotive vehicle manufacturers and semiconductors manufacturing companies

While the partnerships between semiconductor development companies and vehicle manufacturers are together shaping the benefits of semiconductor technology in automotive for both themselves and the drivers, there are some challenges which should not be ignored as well.

Automotive OEMs are facing a range of roadblocks because of the growing complexities of the electronics architecture and on-board software needed to simplify connected vehicles, autonomous driving, powertrain electrification, and shared mobility (ACES) requirements. While they are partnering with software companies or building an in-house team to tackle most of these challenges, upgrading semiconductors will call for a new set of strategies altogether on a business level.

  • Developing a deep understanding of end-to-end architecture for semiconductor software development for automotive – from software use cases to semiconductors – in order to optimize systems.
  • Creating recruitment and retention plans for building semiconductor expertise in-house; irrespective of the automotive OEM’s design decisions, they would need employees that understand and measure concepts.
  • Ensuring they keep their efforts focused on planning and designing semiconductors, which in turn would avoid fragmentation of resources. This would make it easy to double down on the functionalities which truly matter (for example, focusing on one use case area in ADAS)
  • Identifying strategic partners to implement semiconductor strategies and accelerate the integration efforts.

How Can Appinventiv Help with Building a Strategy for Semiconductors in the Automotive Industry?

As a part of our e-mobility solutions we use our deep expertise in both semiconductor and automotive industries to assess automotive OEM’s infrastructure readiness in line with the technical and software complexities of semiconductors. Once that is established, we build an architecture that would turn semiconductors into a middleware – one that sends information through the cloud to an application which then signals the semiconductor to respond in a certain way via its vehicle controls – all of this in a matter of some fraction of seconds.

Additionally, we also carry an expertise in helping car manufacturers understand the semiconductor capabilities and use it in a way that they are able to integrate the technology and the backend software with confidence.

High-tech automotive semiconductors in your fleet

Now that we have looked into the concept of semiconductors in the automotive industry from multiple perspectives, let us close the article with an outlook of the technology’s future.

The Road Ahead for Semiconductors in the Automotive Industry

The automotive semiconductor market is divided into multiple components and a number of players are entering the space to fill the demand for the technology’s adoption such as Texas Instruments, ROHM, Renesas Electronics, NXP Semiconductors, Intel, and Nvidia, etc. The advancements on the technical and partnerships end, is together shaping the future of the technology.

Let us look at some of the other key happenings that can be expected from the technology in the coming future.

Semiconductor Technology Trends in Automotive

Support Vehicle Artificial Intelligence

The automotive industry will be seen using semiconductors for supporting in-vehicle AI systems to copy, augment, and support humans’ actions. In the vehicles of the future which are completely driverless, AI will infer which actions to take depending on the in-car and environmental sensors. This is where semiconductors will be used for deploying these AI systems in a glitch-free manner.

V2X Communication

Vehicle-to-Everything technology enables vehicles to communicate with their environment and make driving efficient and safe. The technology informs of what’s ahead, with zero driver visibility and is capable of seeing corners and obstructions in a radius of up to one mile. To support the communication in a more real-time manner, semiconductors will be used.

Ultra-Wideband Technology Development

UWBs provide exact, safe, and real-time localization abilities that are unrivaled by wireless technologies like bluetooth, GPS, and Wi-fi. The technology is engineered to give spatial awareness to UWB-based cars and devices to enable them to know where the users are.

The role of semiconductors here will be seen in creating automotive UWB IC that would connect the vehicle with a smartphone.

Intelligent Vehicles Demand to Impact Semiconductors Value

When compared to the traditional ICE vehicles, intelligent vehicles are increasingly using more chips. For example, in the case of autonomous driving cars, the average number of chips required starts from 8 and can go up to 20 sensor chips. Additionally, the massive amount of data gathering, processing, and storage done by AVs is leading to a situation where multiple intelligent and high storage chips are needed to be installed onboard.

Growing Number of Sensors

Autonomy is bringing more high-performing sensors to the vehicles, which need to run on advanced semiconductor technologies. In the current state, near-infrared LiDARs are the most deployed sensors for vehicles at SAE level 3, however, this will soon transition to shortwave infrared, since it offers better performance benefits. This transition will call for higher value semiconductors in the ADAS (Advanced driver assistance systems) and autonomy markets.

Better Integration between Hardware and Software

With the advent of the mass production era, the focus of automotive OEMs has majorly been on the optimization of hardware and development of mechanical components which can improve a car’s lifetime. However, a dedicated focus on hardware can be counterintuitive for manufacturers looking to make a prominence in the autonomous vehicle sector.

The need of the hour is to build better collaborations between car OEMs and chipmaking firms to an extent where the manufacturers have a say in the specifications and characteristics definition of microchips that will be used in their fleet.

Prediction-Driven Semiconductors

A majority of the present-day sensors are restricted to “observing” the environment, to expand the use cases companies have started looking for chips that would support prediction-based tracking and analysis. Here’s an example of how these chips could work. Imagine the car in the lane next to you suddenly thinks of overtaking the car in front of them by coming in your lane, the soft cues they will leave like the slight trajectory change when captured by the sensors and analyzed by the semiconductor can help prevent dangerous traffic situations.

5G and 6G-Based Interactions

Modern cars don’t operate as isolated entities. They are always connected with the infrastructures and vehicles around them with whom they constantly share critical sensor data 24*7. This constant information exchange depends on a stable network connection and this is why both automotive OEMs and chipmakers are interested in 5G and 6G technologies.

5G and 6G network connections come with a potential for tapping into high radio frequencies for combining large bandwidth and geographical coverage with limited signal glitches. Their integration, however, would require chipmakers to run at a capacity of 100 GHz or more – something that semiconductor development companies have started looking into.

Better Energy Efficiency

At the back of an increased supply of electric vehicles, there is an increased demand for energy-efficient semiconductors. There are a number of ways chip manufacturers are approaching this – using AI to trade off computing resources, switching to WBG semiconductor power devices to manage control, conversion, and processing of electricity. Additionally, they are also experimenting with using silicon carbide components as their primary technology due to the benefits of lower losses, high switching frequencies, greater robustness in harsh environments, and higher operating temperature.

Final Word

The inclusion of semiconductors in the automotive industry is more prevalent than before – an event which is leading to more partnerships getting established between vehicle manufacturers (automotive OEMs) and semiconductor development companies. What is being brought along these partnerships is a new era where the automotive industry is getting electrified and autonomous.

We hope that the information we covered in the article will bring you in line with the changing trajectory. Reach out to our team if you need more information around the technology or are looking for integrating semiconductors in your vehicles.


Q. What is semiconductor technology in the context of automotive?

A. All of the modern-day innovations of driver assistance technology run on semiconductors. For example, rear cameras need chips to communicate with the onboard displays, similarly, navigation systems, adaptive cruise control, and the infotainment systems also work on semiconductors.

Q. What are the benefits of using semiconductor technology in automobiles?

A. Electrification of vehicles is the primary use of semiconductors which helps in replacing manual systems with the electrical systems, which leads to benefits like better vehicle efficiency, lowered oil dependency, and a significant reduction in carbon emissions. Additionally, they help with increasing driver assistance and safety in automobiles by maintaining connectivity in the cars in real-time.

Q. What is the future potential of semiconductor technology in the automotive industry?

A. The automotive semiconductor market is projected to witness a massive growth in the coming years due to a number of factors like increase in demand for advanced driver assistance systems, rising vehicles electrification, and technological advancements in autonomous technologies. As the automotive industry becomes powerful and intelligent, the automotive semiconductors space will also become indispensable.

Saurabh Singh
CEO & Director
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