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Automotive semiconductor demand remains a challenge for electric vehicle automakers as the year begins. It’s not just his one sector of the changing automotive market that needs semiconductors. Chips are needed for the push towards autonomous, connected cars and electrification.
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The market is starting to stabilize, but demand for EVs and other models that require more semiconductors will only accelerate.
In the first quarter of 2021, around 670,000 vehicles were stuck in the assembly production stage worldwide, according to IHS Markit.
In the semiconductor market as a whole, normal return level, but automakers are still waiting. LG Electronics explains the sophisticated design of semiconductors used in cars and why they take so long to manufacture.
There are two types of semiconductors: memory semiconductors and non-memory semiconductors. Memory semiconductors are mass-produced for each type of product and serve as storage. Non-memory semiconductors, to which automotive semiconductors fall, are manufactured in small batches for multiple product types and services, analyzing and processing information to add value. Non-memory semiconductors account for 60% of the total semiconductor market and require advanced design techniques, resulting in higher costs.
The problem facing automakers is that semiconductor sales for cell phones, PCs, and other computer components have all been able to afford the chips they need.
Automakers were in no rush to change, as the life cycle of a vehicle is clearly much longer than a typical consumer technology product. The car company appeared to have learned its lesson, but is aggressively following its development roadmap.
Assuming manufacturers can keep up with consistently high demand, it’s a huge win for everyone involved. The automotive chip market could grow from $41 billion in 2019 to $147 billion by the end of 2010, according to a McKinsey report.
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