{"id":21193,"date":"2023-04-03T12:31:16","date_gmt":"2023-04-03T16:31:16","guid":{"rendered":"https:\/\/a2globalelectronics.com\/?p=21193"},"modified":"2023-04-05T13:55:40","modified_gmt":"2023-04-05T17:55:40","slug":"legacy-vs-advanced-chips","status":"publish","type":"post","link":"https:\/\/a2globalelectronics.com\/ja\/shortage-mitigation\/legacy-vs-advanced-chips\/","title":{"rendered":"LEGACY VS ADVANCED CHIPS: THE DANCE BETWEEN CHIPMAKERS AND AUTO MANUFACTURERS<\/strong>"},"content":{"rendered":"

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Legacy electronic chips are in short supply, but car makers have been hesitant to make the pivot to newer, more advanced chips.<\/span><\/b><\/h2>\n

Cars are one of the world\u2019s most expensive consumer goods, but non-EV models are run on some of the oldest and cheapest <\/span><\/span>semiconductors<\/span><\/span><\/a>. Chips found in everything from electronic brake systems, power windows, and airbag-<\/span>control units tend to rely on technology sometimes well over a decade old. The <\/span><\/span>global chip shortage<\/span><\/span><\/a> has made it difficult for car makers to meet consumer demand for factory orders. <\/span><\/span><\/p>\n

Electronic chip manufacturers are increasing their output of smaller, more advanced chips, but due to the high sensitivity for safety in manufacturing vehicles<\/span>, car makers are reluctant to upgrade to unproven<\/span> <\/span>designs when it comes to legacy car systems<\/span>.<\/span><\/span> And recent investments in semiconductor manufacturing have done little to help the auto industry. \u201c<\/span><\/span>Nearly all of that [chipmaker investment] is going toward new capacity for chips built on cutting-edge technology, the type that have largely remained plentiful,\u201d the <\/span><\/span>Wall Street Journal <\/span><\/span><\/a>reports.<\/span><\/span>\u00a0<\/span><\/p>\n

What are legacy chips and how are they different from newer, more advanced chips?<\/b><\/span>\u00a0<\/span><\/p>\n

Chips made using the 28-nanometer process or larger are generally considered legacy chips, with higher numbers denoting older technology. In honor of<\/span> Gordon E. Moore<\/span>\u2019s recent passing, it\u2019s worth restating Moore\u2019s Law, that the number of transistors on a microchip doubles about every two years, though the cost of computers is halved. This prediction held true as chips got smaller and smaller; the more transistors that could fit on a chip, the smaller the transistors must become.\u00a0<\/span>\u00a0<\/span><\/p>\n

However, Moore\u2019s law of ever-increasing miniaturization seemingly never reached the <\/span>automotive industry<\/span><\/a> as most of us know it<\/span>. These current and legacy model cars employ comparatively simple transistors that can be anywhere from 45 nanometers to as much as 90 nanometers in size.<\/span>\u00a0<\/span><\/p>\n

Now these devices are in short supply, and chipmakers are telling car companies to wake up and finally join the 2010s. \u201cI\u2019ll make them as many \u2026 16 [nanometer] chips as they want,\u201d Intel chief executive Pat Gelsinger told <\/span>Fortune<\/span><\/i><\/a>. <\/span><\/i>\u00a0<\/span><\/p>\n

What\u2019s keeping automakers tied to these legacy chips?<\/b><\/span>\u00a0<\/span><\/p>\n

In two words, safety regulations. According to the <\/span>Wall Street Journal<\/span><\/a>, \u201c <\/span>Most systems in cars are safety-critical and need to perform in practically every situation regardless of temperature, humidity, vibrations, and even minor road debris. With so much at stake, tried and true is better than new and improved.\u201d Adds Gelsinger, \u201cA lot of it just has to do with the fact that these are proven designs.\u201d<\/span>\u00a0<\/span><\/p>\n

\u201cBasically, everyone is adapting the best they can and trying to build vehicles that will make money and\/or meet regulatory requirements,\u201d says Sam Abuelsamid, an analyst at Guidehouse Insights. \u201cModels that are three, four, five years into their production cycle are going to be less likely to get <\/span>parts for production<\/span><\/a>. Newer and higher-volume vehicles\u2014trucks, newer SUVs, EVs\u2014those are going to get priority.\u201d reports <\/span>Consumer Reports<\/span><\/a>.<\/span>\u00a0<\/span><\/p>\n

Why are chipmakers pushing the auto industry to use advanced chips?<\/b><\/span>\u00a0<\/span><\/p>\n

Semiconductor manufacturers are investing less than 16% of spend on producing <\/span>legacy chips<\/span><\/a>, despite the fact that they have the longest backlog. \u201c<\/span>The small investment reflects how the hardest-to-source chips are made with older technology that is cheaper to use, but it also shows that many semiconductor makers are cautious about making multibillion-dollar bets on the needed chips given the slim profits and risk of falloff in demand.\u201d reports <\/span>Fortune<\/span><\/a>.<\/span>\u00a0<\/span><\/p>\n

In late 2021, TSMC and Sony Group Corp. said they would <\/span>build a $7 billion chip plant<\/span><\/a> in Japan to make semiconductors based on older technology, in an effort to fill some of the gap. The plant isn\u2019t set to start mass production until late 2024, so it won\u2019t help solve the current shortage hitting <\/span>production of cars<\/span><\/a> now. While a significant outlay, it still only represents a small portion of the overall global investment in <\/span>chip manufacturing<\/span><\/a>.<\/span>\u00a0<\/span><\/p>\n

Over the next few years, we\u2019re likely to see car makers incorporate more advanced chips into their designs, especially as EVs become more mainstream. In the meantime, the auto industry will have to contend with <\/span>limited supply of parts<\/span><\/a> that manufacturers aren\u2019t so eager to produce.<\/span><\/p>\n

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