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Chipmakers tested by automotive market's marathon pace

Posted: 03 Oct 2013 ?? ?Print Version ?Bookmark and Share

Keywords:automotive electronics? Power Management ICs? Production Services?

An example is Renault's Zoe. A website called recently reported that "registrations of the Renault Zoe fell again in France to 198, which is lowest since January and over 5 times lower than the sales peak in March." Because Zoe is the nation's most popular EV, "when ZOE goes up or down, the whole EV market seems to follow in France," the website's story said. As popular as the Renault brand is, it appears that not many consumers are prepared to pay extra for Renault's EV.

Second, "[The HEV/EV] market is not yet rational," Riches said. "EV is an emotional purchase." He pointed out that the highest sales of HEV/EV are in the United States, where fuel prices are much lower than in Europe or Asia. "Consumers are not buying HEV/EV just to save petrol," he said. Rather, they're making a statement.

Third, unique vehicles have generally outperformed HEV/EV variants of existing vehicles, according to Strategy Analytics.

Non-traditional players picking their spots
Not included in the discussion of automotive semiconductor demand is the car infotainment market, such as the automotive wireless segment. "Wireless technologies like Bluetooth and embedded cellular are accelerating in the car business with market revenue set to rise by 41 per cent from 2012 through 2018," according to an Automotive Infotainment Market Tracker Report from information and analytics provider IHS.

The IHS report says: Revenue for wireless solutions in cars will reach a projected $1.17 billion this year, up a respectable 5 per cent from 2011. While growth this year has moderated from the sizable double-digit increases of 2011 and 2012, continued expansion is assured in the years ahead. Expansions in the 8 per cent range are expected during both 2014 and 2015.

This trend provides an opening to non-traditional automotive chip companies such as Broadcom, Qualcomm, and Nvidia. Speaking of the power of those "new entrants with consumer-market scale," Riches observed, "they are potentially cherry-picking some high-growth areas."

As a starter, Broadcom's aggressive move into the automotive market is driven by its invention of BroadR-Reach Ethernet, and the company's latest 802.11ac/Bluetooth Low Energy combo chip. By leveraging its first-mover's advantage on a soon-to-grow gigabit wireless application for home networking, Broadcom is eager to sell automotive-qualified 802.11ac into the automotive market.

Qualcomm also sees its role growing in automotive chips, as embedded cellular connectivity is also finding its way into the automotive market. IHS notes that 25 per cent of US cars in 2012 were sold with the feature, for the most part included as standard equipment. "OEMs will increasingly want to use embedded cellular for both safety and diagnostic purposes, because built-in wireless connectivity in cars will prove more robust and reliable than using a tethered or mobile device like a smartphone," explained Luca De Ambroggi, senior analyst for automotive infotainment at IHS.

Strategy Analytics' Riches counts Nvidia as one of the stronger players among the non-traditional automotive chip companies. Tesla's ambitious goal to create an in-vehicle computing platform that rivals top-of-the-line laptop PCs is well known. Nvidia is openly courting Tesla to partner on a Tegra 3-based chipset to drive high-end graphics for Tesla's 12-inch dashboard display and 17-inch infotainment control touch screen.

It's time to rethink
While not every traditional automotive chip company should be chasing every new automotive electronics segment, the automotive landscape is changing, forcing chipmakers to rethink their viability in the automotive electronics market.

"Carmakers need new features they can put on pedestal," Riches said. But in order to keep up with true innovation, he believes that a new model of genuine partnerships must be formed between automotive chip suppliers and carmakers. Now is not the time for carmakers to cling to "self-inflated ideas" about their industry, he added.

Riches summed it up by quoting what Stephan Lehmann, director of global automotive marketing at Freescale Semiconductor said a year ago at the VDI Baden-Baden conference:
The uncomfortable truth is that the fundamentals suggest that the industry needs to rethink how it goes about sustaining innovation. This requires a completely different kind of collaborationand true partnershipto manage through new emerging challenges.

- Junko Yoshida
??EE Times

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