In which country are there orders for infotainment tests in the automotive sector?

semiconductorWhy the auto industry has a chip problem

They can be found in the cockpit, in the driver assistance system and in infotainment: it is hard to imagine cars without electronic components. That is why the auto industry is now feeling painfully that there are chip bottlenecks on the world market. Due to the shortage of microchips, manufacturers such as Volkswagen, Ford, Nissan and Honda have had to stop production lines and cancel shifts in recent weeks.

The problems originate in China. There, in the second half of the year - during the upswing after the first corona wave - more vehicles rolled off the assembly line than expected, and China bought whatever semiconductors were available for cars. However, supplies for the rest of the world are not ready so quickly. Because the large producers switched their production to a large extent to memory for entertainment electronics, report market observers. In the Corona crisis, more televisions, laptops and game consoles were in demand, but the car market was idle.

The German auto industry is not spared from the shortage. Volkswagen, for example, fears that it will be able to produce 100,000 fewer vehicles in Europe, North America and China in the first quarter. On behalf of the manufacturers, the industry association VDA appealed to the Federal Ministry of Economics to work politically to resolve the supply bottlenecks.

Distribution competition

Minister Peter Altmaier apparently presented to the Taiwanese group TSMC, the third largest semiconductor manufacturer in the world. The media quoted from a letter in which Altmaier emphasized the great importance of additional capacities in electronic chips and sensors for the local vehicle industry and its economic recovery. In addition, the CDU politician points out the relevance of the German car industry "for the revitalization of the world economy".

Regardless of the current problems, the auto industry must continue to prove itself in a distribution competition with the giants of entertainment electronics. So far, the large chip manufacturers have only served the automotive industry with a fraction of their capacities. Their bargaining power is correspondingly weaker.

The growing importance of electric cars in particular calls for more semiconductors - but not only. According to calculations by market researchers from AutoForecast Solutions, the production of 280,000 vehicles is currently pending due to the shortage of chips. The "Financial Times" quotes the IHS Markit institute with a forecast of up to half a million failures. The bottleneck could last six months.

There are already voices again calling for new investments in Europe's neglected but strategic semiconductor industry. Because the demand is increasing. The organization Worldwide Semiconductor Trade Statistics (WSTS) puts the volume of the semiconductor market in 2020 at around 433 billion dollars and expects growth of eight percent in 2021.

But how are the market leaders distributed in the world? An overview by sales:

@Tim Herman / Intel Corporation
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# 1 USA

The California-based Intel group leads the world market with semiconductor sales of almost $ 76 billion. But technologically, the US group is fighting with the Taiwan Semiconductor Manufacturing Company (TSMC) for leadership. TSMC is a supplier to many Intel competitors such as AMD and Nvidia, who achieved sales increases of 40 and 50 percent in 2020 with attractive designs and moved up to world ranks 8 and 15. Intel recently lost the order to equip Mac computers with chips. In total, the seven American semiconductor companies among the top 15 had sales of around 170 billion dollars.

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# 2 South Korea

Among the producers with the highest global sales, the two largest Korean chip manufacturers Samsung (pictured) and SK Hynix are the central Asian suppliers in second and fourth place. Samsung sold microprocessors worth $ 60 billion (up 9 percent) last year, according to Icinsights, followed by SK Hynix with $ 26 billion (up 14 percent). The government wants to financially promote South Korea's competence in the development of “smart” electronic components for applications with artificial intelligence (AI) and bring a fifth of this market into the country by 2030.

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# 3 Taiwan

The TSCM example shows how tense the situation is with some central suppliers. As a contract manufacturer, the manufacturer from Taiwan is the world market leader. In terms of sales, it occupies third place in the global ranking with 45 billion dollars and gained around 30 percent in 2020. US sanctions against China's chip maker Semiconductor Manufacturing International Corp. (SMIC) and the IT group Huawei diverted many orders to Taiwan. TSCM primarily served the demand of the automotive industry from the People's Republic and global consumer electronics. The group is also a supplier for American chip manufacturers.