The advent of software-defined vehicles signals big changes for semiconductor manufacturers.
The automobile industry is seeing a seismic shift, transforming from internal combustion vehicles to ones with electrified drive trains that are software-centric. This transition is doing more than changing how cars move—it is also changing how they operate.
These new vehicles, which are known as software-defined vehicles (SDVs), are increasingly more akin to cell phones on wheels than the gas-powered cars of yesteryear. Like cell phones, for example, SDVs fully integrate into their driver’s digital existence.
These vehicles introduce connectivity, automation, and personalization features through over-the-air (OTA) updates, which are new to the automotive space but familiar to mobile computing and telephony. Where car personalization was, until recently, defined by hardware, it will now be defined by software that can be updated, upgraded, and—one day—sold separately from the vehicle itself.
These vehicles will change everything in the transportation sector, including how cars are made, how they’re sold, and how they’re operated. SDVs will introduce significant challenges—and major opportunities—for suppliers as well. Specifically, semiconductor manufacturers, as these cars are more data and processing intensive than any of their predecessors.
What’s driving the adoption of SDVs?
There are several trends driving demand for software-defined vehicles as follows:
- Autonomous Operation: The era of self-driving cars is not yet here. To be sure, there are numerous autonomous functions that the current crop of SDVs offer drivers, which improve the driving experience and safety considerably. These autonomous functions focus on advanced driver assistance systems (ADAS), such as adaptive cruise control or lane assistance on the highway. Multiple sensors power these functions, including cameras, mmWave radar, lidar, gyroscopes, and GPS.
- Easier Maintenance. A car’s operating system can leverage sensor, historical, and driver data to forecast part failures accurately. This increased certainty and safety, combined with the power of OTA preventive maintenance and remote diagnostics, can significantly lower the total cost of ownership (TCO) for car buyers.
- Higher Gas Prices. Hybrid vehicles offer improved gas mileage, while EVs eliminate the need for gasoline. These benefits aside, SDVs promise digitally interconnected systems to optimize efficiency.
- Increased Personalization. A new generation of car buyers prioritizes functional personalization and connectivity of their vehicles instead of focusing on traditional measures like horsepower or external styling. This demand for software-led personalization has made the in-car experience a key battleground for automotive manufacturers to differentiate themselves.
The collection and interpretation of data—collected from both sensors and the driver—support all these benefits.
Silicon behind the wheel and under the hood
An SDV requires multiple controllers to oversee different vehicle functions. For example, one controller might control the car’s interior lights and door locks, while another might focus on managing power consumption.
Beneath these controllers, there may be hundreds of microcontrollers integrated into electronic control units (ECUs) throughout the vehicle, each supporting single-function operations. For instance, there might be a microcontroller inside each headlight, one controlling each door lock, and so on.
The numerous sensors and actuators required throughout an SDV need a powerful computing architecture featuring both centralized and distributed processors. This amounts to many chips—ones that require a great deal of functionality and reliability—since failures could be catastrophic.
In addition to reliability, there’s an increased emphasis on creating multi-use chips that can be applied to multiple uses and environments to maximize economic opportunities for chip manufacturers. Today, this means you might find the same modem in a 5G phone and the dashboard of a car. By extension, this means that, for many semiconductor manufacturers, every chip needs to have the same reliability baked in, since that chip could end up in a vehicle.
Testing is critical
Chip testing has become a critical component of the automotive industry’s efforts to ensure the reliability and functionality of its products.
To survive and thrive in the fast-paced world of semiconductor manufacturing, companies need to adopt new strategies and approaches, including the following:
- Test Automation. Given the high volume and increased complexity of chips, there has been a move away from manual testing of repetitive measurements. By utilizing automated testing that taps software-defined functionality, chipmakers can cover more test cases than organizations doing testing manually, and they can do it faster.
- Companies must be able to compare test results across the company, ensuring apples-to-apples comparisons. Standardizing on common test hardware and software platforms makes these comparisons easier and makes testing go faster. Organizations with standardized test systems report that new teams can go from receiving a part to producing a test report much more quickly.
- Digital Transformation. Centralizing data and analysis allows companies to compare measurement results through simulation, validation, and manufacturing steps. Centrally storing and managing data lets manufacturers find data when and where it’s needed, providing context for analysis. Central management of test data is often a critical step that enables manufacturers to use test results to improve product designs, and it is often a key digital transformation initiative in both semiconductor and automotive manufacturing organizations.
While test automation has obvious benefits, including speeding up testing processes and adding scalability and efficiency, it is just the first step. Chip manufacturers must embrace standardization and centralization of their data—becoming true data- and analysis-led organizations—to handle the increased demands of providing chips to the transportation sector.
Big (but not easy) money
The impact of SDVs on the semiconductor industry is significant and multifaceted. In addition to testing and increased demand for chips with robust functionality, chip manufacturers will need to explore other structural changes to adapt to this challenging and rewarding environment.
In time, we will likely see escalating collaboration between chipmakers and automotive manufacturers. With software playing an increasingly important role in the automotive industry, semiconductor manufacturers and automotive manufacturers are likely to collaborate more closely to develop solutions that meet the needs of both sectors.
Given the fact that SDVs are a relatively recent phenomenon; there is still plenty of room for innovation, and the opportunity for winners in this space is immense. Analysts put the increase of the automotive semiconductor market in North America at a compound annual growth rate of 9.82% between 2022 and 2030 to reach a whopping $57 billion. As a result, semiconductor manufacturers are likely to invest more in research and development to meet the demands of this new market.