[Car Semiconductor Supply Shortage] 2,000 Semiconductors per Future Car, Samsung Semiconductor Becomes More Important

The automotive semiconductor market, valued at $38 billion last year, is projected to grow to $67.6 billion by 2026
The number of automotive semiconductors is expected to increase from 200-300 in conventional cars to over 2,000 in future vehicles

[Image source=Yonhap News]

[Asia Economy reporters Changhwan Lee and Gimin Lee] Samsung Electronics has stepped up its efforts in the automotive semiconductor business because the future automobile market?including electric vehicles, hydrogen vehicles, and autonomous vehicles?is rapidly expanding, and the scale of semiconductors used in cars is expected to grow explosively.

The recent intensification of the automotive semiconductor supply shortage is also largely due to the significant increase in future car sales. Samsung Electronics plans to strengthen its automotive semiconductor business and increase market share by collaborating with global automakers such as Tesla, Audi, BMW, and Hyundai Motor Company.

Automotive Semiconductors to Double in Size in 6 Years

According to market research firm IHS Markit on the 25th, the global automotive semiconductor market, which was valued at $38 billion last year, is expected to rapidly grow to $67.6 billion by 2026, six years later. Currently, automotive semiconductors account for about 10% of the total semiconductor market, which is not very high.

However, both their share and importance are expected to continuously increase. While the number of semiconductors installed in conventional gasoline vehicles is about 200 to 300 units, future vehicles such as autonomous and electric cars require more than 2,000 semiconductors per vehicle.

Accordingly, automotive semiconductors are expected to become very important components not only in the automotive industry but also in the semiconductor industry. This is why top semiconductor companies like Samsung Electronics and TSMC are strengthening their automotive semiconductor businesses.

The automotive semiconductor market is oligopolized by Germany’s Infineon, the Netherlands’ NXP, Japan’s Renesas, the United States’ Texas Instruments, and Switzerland’s STMicroelectronics, but none of them exert absolute influence like in the memory semiconductor sector. Therefore, there is ample room for other semiconductor companies to enter the market.

Samsung Electronics Strengthens Cooperation with Global Automakers Tesla and Audi

As a latecomer, Samsung Electronics has leveraged its foundry (contract manufacturing) process competitiveness to launch the automotive application processor (AP) Exynos Auto, which has already been installed in the Audi A4 model. It plans to install the 5G TCU (Telematics Control Unit), jointly developed with its affiliate Harman, in BMW’s electric vehicle (iNEXT).

Samsung has also launched the automotive CIS (CMOS Image Sensor) ‘ISOCELL Auto’ to prepare for the emergence of the autonomous vehicle market. If Samsung succeeds in mass-producing semiconductors for Tesla’s autonomous vehicles, the world’s number one electric car manufacturer, its market share in automotive semiconductors is expected to rise significantly.

Samsung’s core memory semiconductors are also expected to see significant expansion in automotive applications. To enhance autonomous driving capabilities, memory semiconductors such as DRAM and NAND flash are essential. Memory semiconductors play a key role in autonomous driving central control systems, infotainment, and data systems. Therefore, memory semiconductor installation in future vehicles is also expected to increase.

TSMC, the world’s number one semiconductor foundry company based in Taiwan, is also strengthening its automotive semiconductor business. According to Nihon Keizai on the same day, TSMC stated that expanding production to meet current automotive semiconductor demand is its top priority.

Park Yu-ak, a researcher at Kiwoom Securities, said, “The automotive semiconductor market is currently dominated by foreign companies, but there is no absolute leader. Samsung Electronics is strengthening its related business, so it is possible to expand market share in the mid to long term.”