What’s Driving the Automotive Industry in 2022?

The automotive industry is being disrupted by changing consumer preferences, technology innovations, and global supply chains. Cars are becoming computers on wheels with more processing power than the average personal computer. Consumers are reliant on computers, cellphones, and watches that are all interconnected, and drivers expect this same convenience experience with their vehicles. Demand for new automotive capabilities is growing, making it critical for companies to adapt. This desire for convenience is creating opportunities for original equipment manufacturers (OEMs). Semiconductors are an increasingly critical aspect of automotive innovation and value delivery. OEMs must become masters of software and semiconductor technology to succeed on their way to a truly software-defined vehicle. Over-the-air updates will constantly enable new functionality and services which will also establish new business models and a shift in the business scope. 

Industry Drivers

To take full advantage of the future of automotive technology, it is important to align with the industry trends. Not only is there growing interest from consumers in electric vehicles (EVs), but the United States Government plans to increase the EV target to 50 percent of all vehicles produced by the end of the decade, as a part of their Electric Vehicles Initiative. Automakers are expected to spend up to $515B by 2030 on EV and battery production. EVs were once seen as niche but are now appealing to mainstream buyers. With company backing and interest from consumers, EVs are among the highest demand vehicles.  

In addition, OEMs are expecting as high as 10% of their future revenue to come from software subscriptions, driven by growth of on-board applications. This software is used to drive the infotainment experience that is expected of modern vehicles. Audio, voice, and V2X (vehicle-to-vehicle) input are unified to optimize the transportation experience. By 2030 some OEMs expect their licensing and subscription revenue to increase by a factor of ten. Others expect they will make more money from subscriptions and licensing than from the cars themselves. These are significant shifts in the industry business model. 

Despite rapid innovation, several OEMs are lagging due to supply chain disruptions. These disruptions stem from parts shortages like semiconductor, transitions to remote working, and regional trade mandates. Some factories have closed, causing OEMs to rework their supply chain. Traditionally OEMs collaborated with Tier 1 suppliers but going forward there is a trend to bring Tier 2 suppliers into their sphere as well. Consequently, OEMs are struggling to meet start-of-production schedules. 

Semiconductor Trends

Despite these challenges semiconductors are shaping the industry, and the market is projecting a hopeful outlook. Automotive companies acknowledge that semiconductors are increasingly delivering value in leading edge cars. The concentration of semiconductors in cars is expected  to double what it is today (source IBS), with the average cost for semiconductors increasing to twelve hundred dollars per vehicle by 2030 (source USITC).

For inventory control and system optimization reasons, OEMs are starting to develop semiconductor chips and software themselves. By 2027 it is expected that five of the top OEMs will have in-house chip design teams in place (source Gartner). The chips will be purpose-built, optimized for the platform’s anticipated workload, compute platform, and software. This is expected to multiply the number of chip design starts each year, adding to the already healthy semiconductor industry. Hence with the increasing complexity of semiconductors, designers require leading edge design tools and methodology to fully realize advanced automotive capabilities.   

With the increased semiconductor demand the supply chain disruptions may impact vehicle production. The restrictions on imports and exports due to the global pandemic have led to lower supply for semiconductors. Though selective semiconductor inventories indicate supply challenges may be easing. Customer demand remains robust and is fueling continued innovation.  

Automotive Semiconductor Technology Drivers

As consumer expectations become more refined, technical trends are driving the future of automotive design. Autonomous driving and infotainment are becoming increasingly in demand as drivers expect vehicles to act like mobile computers. Autonomous cars are generating up to 19 terabytes of data per hour and the necessity for data storage and a zonal architecture has become a very important driver for the industry. At that rate, the data from an autonomous car could fill up the average PC in under 2 minutes.   

Along with this speed for data transfer, autonomous cars require a tremendous number of operations to be performed every second. Current autonomous cars’ self-driving compute platforms require 144 tera operations to be executed every second at 72 watts of energy. This kind of power pushes the bar for what companies looking to get involved with self-driving cars need to accomplish to stay competitive.  

Computing power, however, is not the only type of power OEMs must optimize for. For the energy a modern EV battery can hold, consumers expect EVs to drive 300 miles in just 30 minutes of charging. This means innovations in power consumption are necessary for automotive companies to stay competitive with each other. 

As state-of-the-art electronics propel the automotive industry into a future of more connectivity and autonomy, the development of safety-compliant semiconductors is critical. New design techniques and tools must be used for advanced safety analysis, safety verification, and safety-aware implementation for digital driving analog and digital full flows. 

Conclusion

As with all innovation, the automotive industry faces technological challenges. We are entering a new era of system design and optimization, so the traditional disciplines, methods, and design choices no longer hold up. Specifically for automotive, these challenges follow three key areas of innovation: Zonal architecture, edge computing, and digital cockpit. Zonal architecture refers to the technical shift that needs to occur to account for increasing complexity and computational demands. The Zonal Architecture concept created for the automotive industry introduces the Vehicle Server and Zonal Gateway, which work together to get further insight on the status of the vehicle with less physical engine control units (ECUs). Edge computing refers to the advanced driver assistance systems. OEMs have started to transition to their own proprietary ADAS platforms, leading to more efficient data transfer for the power consumed. The digital cockpit is the main interface between the driver and the car. It takes the previously mentioned areas of integration and makes the information in the vehicle visible to the driver. Advances in the digital cockpit will use propriety semiconductor designs to get the information to the driver in a clear and timely manner. 

For these automotive trends and challenges, Cadence provides leading solutions for designing the most advanced proprietary semiconductors and automotive technologies. With all the current market challenges, this technology is critical for the future of the industry. The companies that embrace these solutions are already leading the way. The computing power that was once unimaginable is now a minimum requirement, thanks to Cadence’s cutting-edge technology. 

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