The convergence of smart vehicles, connectivity, and electrification is transforming the auto industry – and its electronic supply chain.
Cars have more capabilities than ever before, and thus greater needs from the electronic supply chain. To keep pace with the rapidly increasing demand for electronics, and the highly skilled workforce required to make and maintain them, the auto industry must take a proactive approach.
How Electronics are Changing the Auto Industry
The past two decades have seen a surge of technological growth in the auto industry. Cars are becoming, essentially, computers on wheels. Here are some of the ways in which electronic components are taking over modern vehicles.
Radar
Advanced driver assistance systems (ADAs) rely on radar to sense elements of the vehicle’s surroundings like speed, distance, and obstacles. Radar is also the foundation of autonomous vehicles (AVs), which are no longer the stuff of science fiction. As demand for ADAs and AVs has spiked, so has demand for automotive radar systems. New car models are expected to incorporate up to 10 high-precision, multi-functional radar sensors per vehicle by 2025.
Connectivity
Vehicles are becoming increasingly connected, incorporating features like navigation, emergency assistance, and personalized infotainment. These features all enhance a vehicle’s driving experience and safety, but they also demand more electronic components than ever before. Car connectivity will only continue to grow, especially with new technologies like AI-powered virtual assistants, and so will the semiconductor content per vehicle.
EV infrastructure
Electric vehicles (EVs) incorporate more electronic components than their gas-powered predecessors, and these chip-heavy vehicles are driving up demand. But it’s not just the vehicles themselves—don’t forget about the EV infrastructure needed to charge and maintain the next generation of clean cars. EV charging stations require high power and voltage, and thus semiconductors with minimal power loss. This is driving demand for cutting-edge semiconductors like silicon IGBTs (insulated gate bipolar transistors) and silicon carbide MOSFETs (metal oxide semiconductor field effect transistors).
Help Wanted: A New, Highly Technical Workforce
Chips aren’t the only area where the auto industry may experience a shortage. As cars become more advanced, automakers face the challenge of finding skilled workers to ensure the performance and safety of new high-tech systems. It could be a tall order for an industry already struggling to keep up. Automotive companies are already feeling the pressure of a lack of skilled workers. A 2022 report from Ennis & Co. predicted the automotive industry will face a shortage of 2.3 million skilled workers by 2025 and 4.3 million by 2030. As the number of EVs on the road is increasing exponentially, the number of technicians with the qualifications needed to build and repair them isn’t keeping pace.
Automakers need to hire and keep chip engineers, despite competition from more established companies in the technology space. To keep up with the electronic revolution, the auto industry must invest in building a chip-savvy workforce and establishing itself as an innovator in the semiconductor field. With the market for cutting-edge vehicles exploding, the auto industry has a major opportunity for growth—but it must expand its search for talent now to prepare for the future.
The automotive sector’s increasing demand for chips could put a strain on the global supply chain in the coming years. Some component manufacturers have taken notice and have started investing in capacity expansion to meet the rising demand for chips. Others have entered into collaboration with automakers to develop new chip technologies. As electronics continue to revolutionize the auto industry, vehicles will keep evolving—and so must the semiconductor supply chain.
Read more:
● Legacy vs Advanced Chips: The Dance Between Chipmakers And Auto Manufacturers
● What’s Driving the Continued Automotive Chip Shortage
● Automotive Electronic Components: An Emerging Industry to Watch