Analog chips remain a problem
The next crisis is already waiting
Hyundai Ioniq 5
© press-inform – the press office
The semiconductor crisis still has the automotive industry in a stranglehold. But not only the lack of magnesium could become the next painful major construction site for the car manufacturers, after a brief easing in the coming year, a new economy of shortages is also likely to prevail for the analog chips.
Analog chip capacity is expected to increase over the next few months, but probably not enough to meet the increased demand for chips in cars. Therefore, the first analysts expect that the supply could become scarce again towards the end of 2023. This would have a major impact on large parts of the auto industry and many electric vehicles in particular could retain the current supply problems. Based on the general situation, the shortage of automotive semiconductors is likely to weaken over the course of the year and with a view to the first half of 2023. However, there is a risk that new pressure points will build up again from the end of next year. According to the analysis of the IHS analysts, there are new concerns about the supply of analog chips. After microcontrollers (MCU) in 2021, analog chips are likely to become the most important bottleneck for vehicle production in the next three years.
The two main chip categories hit hardest by shortages are MCUs and analog chips. At the beginning of last year, all the attention was initially focused solely on the missing MCUs. The proprietary nature of MCUs made it virtually impossible to have two sources of MCUs for an Electronic Control Unit (ECU) as there were at least software and pinout differences. MCUs are manufactured on process nodes that are typically over 40nm and some of them are now being processed as low as 28nm. There is an ongoing trend towards centralization of electrical and electronic architectures, resulting in fewer MCUs per vehicle. However, the shift to new architectures and smaller process nodes is not beneficial for all chip types. For example, the demand for analog chips is likely to continue to grow regardless of new E/E architectures, as they are an integral part of many vehicle systems. Hundreds of analog chips are sometimes required for control units in a car – from the electric seat adjustment to the heated rear window to the chassis control.
Now that the supply of MCUs is slowly improving, the supply of analog chips could become a new problem. There are technical and commercial reasons why these continue to be manufactured on mature process nodes rather than top-of-the-line process nodes. At the same time, the demand for analog chips for mobile phones or in entertainment electronics is also increasing. Considering the growth of vehicle segments and powertrain mix, the average number of analog chips per car is expected to increase by more than a quarter in 2023 compared to 2021. This growth is mainly due to the ongoing trend towards electrification.
According to the current IHS analysis, 86 percent of the total investments announced for 2021 and 2022 are for advanced technologies that only require a few chips in the car. Only 12 percent goes into the mature process used to make more than 90 percent of the chips in cars. As demand for analog chips increases regardless of the change in E/E architectures, this imbalance in announced capital expenditures could lead to future bottlenecks in analog chips and other legacy nodes. The investments and capacity development show that the situation for the automotive industry should improve later in the year and in early 2023. By contrast, towards the end of 2023 or beginning of 2024 there could be a supply shortage. Automakers are working to gain better insight into the semiconductor supply chain so they can react faster and more flexibly.