The use of chips in light vehicles grew 40.6% in the last two years

The number of average semiconductors in light vehicles grew 40.6% in the last two years, according to estimates from Goldman Sachs.

The average thus went from 212 units of automotive semiconductors in each motor vehicle in 2019 to 298 units in 2021.

The reason? An analysis by the US Congress highlighted that recent trends in vehicle design, including vehicle connectivity, electrification, and an ever-expanding range of autonomous features, have increased the number and cost of semiconductor components used in the world’s automobile. average passenger, sport utility vehicle, or pickup truck.

Also advanced driver assistance systems (ADAS) are increasing the cost of semiconductor components used in vehicles. The previous trend shows growth from 61 automotive semiconductor units in 2005, to 97 units in 2010, and then to 134 units in 2015.

The same analysis explains that the increased consumption of these intermediate products, together with the shortage of semiconductors, has slowed the production of automobiles and has forced the temporary closure of many assembly plants around the world.

According to data from consulting firm AutoForecast Solutions, North America lost the production of 2.3 million vehicles in 2021 due to plant closures.

Initially, anticipated declining consumer demand prompted automotive system providers to cut back on orders with chipmakers. Consequently, chipmakers allocated capacity and inventory to industries experiencing increasing demand due to the increasing use of telecommuting and online learning.

As demand for vehicles rebounded in the second half of 2020, auto suppliers faced long lead times for acquiring semiconductors as chipmakers tried to keep up with demand in many industries.

The situation was exacerbated in early 2021 by severe winter weather in Texas that affected two major semiconductor component suppliers, NXP and Samsung, and a fire at another major supplier, Renesas, in Japan.

As if all this were not enough, according to analysis by the US Congress, an estimated 70% of all microprocessors required for electronic vehicle control units come from a single chipmaker, Taiwan Semiconductor Manufacturing Company (TSMC).

Yet the auto industry accounts for just 3% of TSMC’s total revenue, as estimated by IHS Markit, an analytics firm.

Although vehicle manufacturers have many suppliers of electronic control units, those supplier networks rely primarily on one microprocessor producer.

This exposes the entire network to an outage if that manufacturer encounters production problems.

Additionally, automotive system and component suppliers face competition between industries as foundries weigh how to distribute manufacturing capacity among various types of chips, including some with higher demand and others that offer greater profit potential. These supply chain vulnerabilities became apparent during the global coronavirus pandemic.

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Reference-www.eleconomista.com.mx

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