In the electric vehicle semiconductor market, which has recently been suffering from a supply shortage, it has been argued that rather than entering the MCU-centered automotive semiconductor market where solid global powerhouses have established themselves, it is necessary to seek opportunities in the AP (data processing function semiconductor) market that will be newly created amid technological changes.

On the 12th, Lee Ji-hyung, a researcher at the Korea Automobile Research Institute, released an analysis of industry trends titled, "The automotive semiconductor shortage must be addressed from a long-term perspective."

According to this report, the current MCU-centric automotive semiconductor industry is characterized by limited market size, low profits, and supply chain bias.

TSMC, the largest contract manufacturer of automotive semiconductors, saw its automotive semiconductor sales account for approximately 3% of its total sales in the fourth quarter of 2020. Most wafers used for MCU production are 8-inch (200mm) in size, resulting in low productivity and profitability.

In particular, automotive semiconductors require about 10 years for 'development-test-mass production' due to demanding usage conditions, and their supply is concentrated in a few companies due to higher functional safety, reliability, and customer demands compared to other semiconductors.

The domestic automobile and semiconductor industries are each world-class.The automotive semiconductor market is 98% dependent on overseas markets, and there is no domestic supply chain for key items such as MCUs.

Accordingly, it is analyzed that rather than entering the MCU-centered automotive semiconductor market where solid global powerhouses have established themselves, it is necessary to seek opportunities in the AP (data operation/processing function semiconductor) market that will be newly created amid technological changes.

While MCU-based distributed processing electronic control units (ECUs) are currently installed (approximately 40 per vehicle), it is expected that AP-based centralized processing high-performance controllers (approximately 3 per vehicle) will be adopted as the transition to electric and autonomous vehicles accelerates over the next 5-6 years.

If automotive semiconductors are gradually integrated and replaced by general-purpose integrated chips such as APs and expanded to various types of new mobility (e.g., urban air mobility, personal air vehicles), it is analyzed that sufficient demand will be secured and economies of scale can be achieved.

The high-performance semiconductor market, including AI accelerators (NPUs: Neural Processing Units), security chips, network processors, and high-bandwidth sensor ICs, is in the formation stage of future vehicle technology, and global companies are conducting research and development. It is also expected that it will be possible to challenge markets such as AI, security, and data through collaboration between domestic Tier 1 SW companies and semiconductor companies (Fabless).

Researcher Lee Ji-hyung said, “Vehicle APs are related to life, so they require strict stability verification and a long development and testing period, and management and upgrades for a usage cycle of over 10 years are required, which places a large burden on companies, so government support is necessary.” He added, “In order for suppliers to develop products that meet the needs of demand companies and succeed in commercialization, we need to support mass production performance evaluation and performance improvement to overcome the business discontinuity (Death Valley) in semiconductor development and mass production.” He said, "It is necessary."

Meanwhile, the recent shortage of automotive semiconductors began with automakers' failure to predict demand due to COVID-19, and the difficulties were further aggravated by the priority production of semiconductors for mobile phones and home appliances, the shutdown of semiconductor factories due to the cold snap in Texas, the fire at the Renesas plant in Japan, the world's third-largest automotive semiconductor manufacturer, and the disruption of operations at the TSMC plant in Taiwan due to water shortages.

The item with the greatest supply and demand disruption is currently the MCU (Micro Control Unit), which controls the battlefield system, and a bottleneck is occurring in the 'production' part of the value chain of 'semiconductor design → production → module/system manufacturing → mass production of finished vehicles.'

The lead time for automotive MCU production (the period from production planning to receipt) has typically been 12 to 16 weeks, but with the surge in TSMC semiconductor orders, the lead time is now taking 26 to 38 weeks or more.

Due to the shortage of automotive semiconductors that began in the second half of 2020, global automakers are reducing production, and in Korea, production disruptions at Hyundai and Kia Motors have been in full swing since April.