JW Insights: Closure of OPPO's chip unit raises awareness of challenges for Chinese automakers venturing cross-industry to chip design
Chinese article by 陈炳欣
English Editor WM Zhang
06-07 16:43

By Gabby Chen

(JW Insights) Jun 7 -- The closure of Chinese top smartphone vendor OPPO's chip design unit has sent a warning signal as well to the country's automotive companies, shedding light on the challenges for their venture cross-industry in designing their chips, according to a recent JW Insights report.

Chinese carmakers like BYD, Geely, and NIO have made strides in self-developing chips. BYD founded BYD Semiconductor, while Geely established auto chip company - SiEngine Technology (芯擎科技). Additionally, NIO focuses on the in-house development of LiDAR chips for autonomous driving.

This shift towards self-designing chips stems from various factors that drive automotive companies.

Zhao Qiang, vice president of Singulato Motors (奇点汽车), a Chinese EV startup, noted one of the key drivers is the past chip shortage, which was exacerbated during the COVID-19 pandemic. He highlights the importance of car manufacturers gaining control over core products and technologies to ensure the safety and stability of their supply chains.

Chen Shanghua, a fellow of the China Society of Automotive Engineers, explained that the scarcity within the supply chain has resulted in critical chips being either unavailable or priced higher. This situation has prompted car manufacturers to venture into chip design.

Chen emphasizes the role chips play in enhancing automotive intelligence. Modern high-end intelligent vehicles can incorporate thousands of chips, with certain vehicles from Arctic (极狐汽车), a subsidiary of BAIC Group, equipped with nearly 2,000 chips.

Li Xingyu, vice president of Horizon Robotics (地平线), a Chinese provider of computing solutions for autonomous driving, noted carmakers should take steps to simplify architectures, reduce automotive chip variety, and enhance the performance and integration of individual chips. These measures are vital for addressing the challenges of managing a large number of chips in the automotive industry.

Car manufacturing is a precise process where even the absence of a single chip can halt the entire production line. Despite the improved chip supply and demand situation, investing in chip supply continues to be crucial for automakers to ensure uninterrupted operations.

The automotive industry encompasses multiple chip segments, such as autonomous driving chips, power semiconductors, and MCUs. Identifying the most critical chip type for investment remains a key consideration for car companies.

Several manufacturers focus on control chips and power semiconductors below 28nm process due to versatility, lower investment costs, and manageable risks. This strategy ensures a steady supply of entry-level models and addresses high-end model demands, said Zhao Qiang.

Xu Chao, vice president of SemiDrive Technology (芯驰科技), a Chinese auto chipmaker, stressed the importance of considering multiple design dimensions, such as performance, power consumption, price, reliability, safety, and durability when developing reliable automotive-grade chips.

Yang Yuxin, chief marketing officer of Black Sesame Technologies(黑芝麻智能), a leading Chinese autonomous driving solutions provider, explains that carmakers initially opt for self-developed chips due to the absence of suitable chip platforms. However, as the industry progresses, collaborating with chip design companies for customized solutions becomes a better choice.

Even in customized chips, Yang noted that approximately 50% of the internal components are shared. This enables chip designers to implement differentiated designs and introduce specific functional variations based on existing versions. Such an approach holds great potential for development speed and efficient utilization of human resources, said the JW Insights report.

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