Auto and IC industries are unnatural bedfellows

The auto industry is getting more sophisticated both in its chips and in its approach to procuring chips, TSMC’s European general manger  Paul de Bot told the 27th Automotive electronics Congress in Ludwigsburg, Germany this week.

Long seen as a tech laggard wedded to trailing edge processes, the auto industry actually starting using 5nm processing in 2022 –  only two years after 5nm entered volume production, said de Bot. 

de Bot advised automakers to start planning to move to advanced nodes as soon as possible, reports All-Electronics.

de Bot emphasised: “It is not possible to reserve free capacity for the auto industry” – pointing out that the high capital requirements of the IC industry meant it had to keep its capacity utilisation high. Accordingly, if orders are cancelled, a foundry has to immediately find replacements to keep utilisation high.

de Bot told the automakers that it could take six months to  manufacture, package, test and deliver ICs which impacts flexibility and makes planning order quantities very important.

The importance of the auto industry to the chip industry is still fairly low. In Q1 only 7% of TSMC’s revenues and only  10% of worldwide chip industry output is for auto.

In 2030, it is expected that auto ICs will represent 15% of the semiconductor industry’s total output.