By Li Panpan

Chinese players are accelerating their efforts in developing automotive-grade MCUs driven by strong market demands and shortages. However, they need to overcome hidden worries to achieve more significant growth. 

Automotive-grade MCU, regarded as the “brain” of a vehicle, is the core device used in body control, driving control, infotainment, and driver assistance, and has stringent requirements on its functions, reliability, operating temperature, and other indicators.

Data from CITIC Securities shows that an average of more than 70 MCUs are used in a traditional car, while more than 300 are used in smart cars. With the popularity of new energy vehicles, demand for automotive-grade MCUs shows a rapid growth momentum. 

International players occupy a dominant position in the industry. Strategy Analytics data shows that in 2020, global MCU suppliers Renesas, NXP, Infineon, Cypress, Microchip Technology, and STMicroelectronics have a market share of 90% in the automotive-grade MCU market. Currently, the self-sufficiency rate of Chinese automotive-grade MCUs is less than 5%.

With strong market demands and chip shortages, global players are raising their prices. STMicroelectronics said it would increase the price of the whole product line in the second quarter of 2022. The latest market report from electronic component distributor Future Electronics shows that global MCU giants such as Renesas, Infineon, NXP, and Microchip are on a trend of raising prices with longer delivery time.

Therefore, the automotive-grade MCU industry might enter a new turning point, bringing Chinese players unprecedented opportunities to enter the supply chain for medium and large OEM manufacturers, industrial and automotive electronics. 

Chinese MCU companies continue to emerge and accelerate their market process, and many auto brands are active in introducing Chinese brand MCUs.

There are but not limited to GigaDevice(兆易创新), Autochips(杰发科技), Chipsea(芯海), ChipOn(芯旺微电子), BYD Micro(比亚迪半导体), National Chip(国芯科技), Sine Microelectronics(赛腾微), Xiaohua Semiconductor(小华半导体), HSXP-HK(航顺), Chipways(琪埔维), Nations Technologies(国民技术) which announced plans to commercialize their automotive MCU products.

GigaDevice is reportedly sampled testing its automotive-grade MCU product and is expected to start mass production in mid-2022. ChipOn’s KF8A/KF32A series of automotive-grade MCUs have been mass-produced and bought by some car companies; Nations Technologies’ MCU chips have been shipped to automotive clients.

BYD Semiconductor’s automotive-grade MCUs have exceeded 10 million in mass production, and a new automotive-grade 8-bit general-purpose MCU has been launched.  

SemiDrive released the high-end automotive-grade MCU E3 series and claimed it as the world’s highest-performance automotive MCU product; National Chip’s new generation of automotive-grade MCU products has received orders of more than 1.1 million units. 

GigaDevice, Autochips, and BYD Semiconductor are the Chinese pioneers in automotive-grade MCUs, while others enter the field for more applications in consumer electronics and industrial control. 

Despite their progress, there are still many hidden worries for the Chinese players. 

Firstly, they started at different times, and there is still a long way to go from mass commercialization. 

Secondly, they urgently need to tackle high-end products. Chinese car chip products in recent years are mainly for low-end, simple, and peripheral, such as wipers, windows, remote controls, ambient light control, and dynamic running lights, while high-end chips are still firmly dominated by international manufacturers.

Thirdly, automotive-grade chips have strict working environment requirements, with a very long verification cycle and product life cycle. It is not easy to adjust the supplier once confirmed. So it’s essential to dispel the concerns of auto manufacturers. 

Fourthly, upstream automotive IP is a key easily overlooked by Chinese players and factors like wafer foundry quotations and related resources. 

Semiconductor IP is key to solving the four automotive core processor design challenges: computing power, low power consumption, reliability, and security. However, only a few Chinese companies have automotive IP, while most of them are challenging to operate without the IP of overseas giants. 

Finally, it’s tough to build an ecosystem of automotive-grade MCU, although Chinese players have made some technical breakthroughs. 

There are other issues to tackle, such as difficulties obtaining related materials, weak after-sales service, and longer development cycles. The talent shortage is another challenge that has perplexed the entire industry. Chinese companies need to work on their shortcomings in a down-to-earth way instead of rushing to launch new products and seeking instant profits.