Auto industry's share of global microchip capacity rises as EVs, software grow

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pThe automotive industry surpassed the consumer and industrial sectors in 2023 to become the third-largest end market for semiconductors worldwide as demand for automotive-grade microchips continues to grow./p

The auto industry has surpassed the consumer electronics and industrial sectors to become the third-largest end user of semiconductors worldwide as demand for automotive-grade microchips continues to grow.

The figures rise as connectivity and advanced vehicle safety systems become more sophisticated and as more electric vehicles are built. Much of that spending has been announced since the passage of the bipartisan CHIPS and Science Act in 2022, which gave the federal government billions of dollars to award as grants to help semiconductor manufacturers boost their U.S. production.Several chip manufacturers have warned there will be delays in starting production at their new plants. In January, Taiwan Semiconductor Manufacturing Co.

The semiconductor shortage of the past few years is mostly over — at least as it relates to new-vehicle production volumes. But automakers are still producing vehicles that are missing specific options because they have to prioritize which features receive chips, Fiorani said. Automakers and suppliers have been rushing to secure supplies of new silicon carbide microchips, which are generally more efficient than traditional silicon chips and thus appealing to companies looking for any way to make their EV batteries last longer and charge faster.

 

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