Rethinking about the lack of cores for automobiles: How to accelerate the entry of domestic cores into the supply chain

After the “core shortage” problem broke out in the automotive industry, automakers and domestic Tier1 (automotive manufacturers’ first-tier suppliers) coordinated production capacity to meet their urgent needs, while on the other they also began to support the local supply chain and make longer-term plans.

However, domestic automobile chips only account for 3% of the global share. There are not many domestic companies that have formed production capacity. In addition, due to stability considerations, the supply chain has concerns about replacing domestic products. On June 10, at the 2021 World semiconductor Conference sub-forum and the first World Automotive Semiconductor Innovation Collaboration Forum, the industry discussed solutions to the various pain points of local chips.

Based on years of cooperation, the global chip manufacturers have formed a strong binding relationship with the supply chain and car manufacturers. Zou Guangcai, deputy general manager of the National New Energy Vehicle Technology Innovation Center, said that in the selection process, the upstream and downstream are forming a kind of anxiety. The downstream is worried that domestic chips have not been verified on a large scale. If there is a problem, the entire brand and quality will be affected. The upstream is worried that the value of chips to automotive customers is very low. If vehicles undergo large-scale repairs, recalls, and replacements, it will put a lot of pressure on chip factories.

Zou Guangcai said that one response plan is to use financial insurance to alleviate this anxiety with a market-based approach. Recently, some domestic insurance companies are communicating and negotiating with upstream and downstream companies, launching a pilot program on the application of insurance on car chips to share the risks in technical verification and business negotiations. Relevant national departments are also actively promoting this matter, and together with industry associations, domestic automobile chip products are included in the product catalog of the “First Set of Major Technical Equipment Insurance Compensation Mechanism”.

Another pain point is the docking of industry supply and demand. Zou Guangcai said that from the end of 2020 to February 2021, the Ministry of Industry and Information Technology conducted a survey on the supply and demand of China’s automotive semiconductor industry, soliciting supply and demand information from 85 domestic companies, and included 568 products from 59 domestic semiconductor companies, covering 10 categories. The products involve 53 sub-categories. In terms of product demand, 1,000 pieces of product demand information from 26 domestic auto and parts companies are collected from 14 complete vehicle companies and 12 auto parts companies.

Zou Guangcai said that at that time, the manual was made to help upstream and downstream to understand each other’s needs. Later, many companies reported that they found partners through the manual and were negotiating.

The pain point is also in terms of standard access. Chen Dawei, a researcher at the Electronic Industry Standardization Institute of the Ministry of Industry and Information Technology, said that the basic requirements and standards for domestic automobile chip access are currently not available, and there is still a big gap in the industry’s understanding of some key standards. In his view, various companies still have many deficiencies in chip reliability design capabilities.

In terms of chip technology, Yang Zhongping, deputy secretary-general of the Association of Automobile Manufacturers, said that at present, my country’s automotive-grade chip industry is still very weak. For example, control chips are relatively late in domestic maturity and have relatively low levels. The industry should open up applications based on existing conditions. To break through the difficulties, gradually increase the promotion and application density of domestic chips to form competitiveness.

At present, some domestic automobile chip companies, such as MCU, have already relied on the consumer-level market as a starting point and accumulated technology, and through the gradual verification of technology and supply chain, the path is correct to move towards the level of car regulations. However, Chen Dawei said that there is a situation in the industry that some non-car-compliant chips are converted to automotive applications, which is risky.

Chen Dawei said that some companies did not consider the requirements of vehicle regulations when they started designing, and did not select according to the principle of chip screening in production. Finally, the functional indicators were lucky enough to meet the needs of vehicles, and there was no suitable chip in the downstream. , It will be adopted temporarily, so there will be some risks. Chips are designed and produced, not tested. Therefore, even if manufacturers pass a series of tests in accordance with the AEC-Q100 standard, they cannot prove that such chips have been zero defects after a few years.

Author/ Shen Yiran

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