This is how China’s automakers deal with supply chain mayhem
- The global semiconductor shortage dented the supply of passenger cars in 2021 by more than two million, the equivalent of around 10% of the Chinese market.
- Auto giants like Geely and SAIC are beating the global shortage and US sanctions with in-house chips.
- Geely’s chip is one of the most advanced automotive systems on a chip in the world.
Around the world, a shortage of semiconductors, the tiny but critical chips used to calibrate cars’ fuel injection, run infotainment systems or provide the brains for cruise control, has upended automaking. Making matters worse is the supply chain crisis. To beat both the crisis, China’s carmakers are walking down the self-sufficient path.
Like many other large auto players around the world ,China’s big players too are taking matters into their own hands to build stronger domestic supply chains. The push comes as Chinese President Xi Jinping is pressing for stronger domestic supply chains that are less vulnerable to US sanctions and the pandemic.
Earlier this month, China’s leading private automaker Zhejiang Geely Holding Group’s unit SiEngine Technology unveiled a cutting-edge automotive chipset–Dragonhawk 1. Geely Chairman Eric Li during the unveiling admits that “Semiconductors are extremely important for the country.
They are the key to establishing secure and stable supply chains.” Dragonhawk 1, according to reports, is designed to serve as the brain behind smart cockpits, which include dashboard displays, navigation systems and cloud-based services.
The chip is built with 7-nm technology and is one of the most advanced automotive systems on a chip in the world. Its mass production will begin within the July-September quarter of 2022, and the chips are expected to be incorporated into Geely vehicles by the end of next year.
Among it’s added advantages includes allowing the cars to quickly process images and other data collected by driver-assistance systems, as well as external communications. Reports claim that the DragonHawk 1 has already received orders for several vehicle models and by 2023, it is expected that there will be at least two or three automakers choosing the chip.
To recall, SiEngine was formed by Geely unit EcarX and Arm China, the local unit of British chipmaker Arm. SiEngine aims to launch a new 5-nm chip as early as 2024 to meet the demands of constantly evolving self-driving technologies.
Other automakers upping China’s supply chain
SAIC-GM-Wuling Automobile, a joint venture between China’s state-owned SAIC Motor and General Motors, has also begun developing its own chips. The joint venture plans for at least 90% of chips used in its EVs to be made in China by 2025, according to a local media report.
Separately, even Dongfeng Motor has begun mass production of power semiconductor modules for new energy vehicles, while BYD looks to list a semiconductor unit to bolster development capabilities, Nikkei reports.
According to Nikkei, China is said to have a self-sufficiency ratio of about 20% for all semiconductors, and 5% or less for automotive chips specifically. British research company LMC Automotive separately reports that the global semiconductor shortage dented the supply of passenger cars in 2021 by more than two million, or the equivalent of around 10% of the Chinese market.