On October 17, the Chinese State Administration for Market Regulation held a conference to promote the industrialization and quality improvement of domestic automotive-grade chips. At the conference, the first list of domestic automotive-grade chip certification review companies was officially released along with version 1.0 of the automotive-grade chip certification system.

From January to August, Chinese cars accounted for 67% of the world’s new energy vehicle sales. However, China’s self-sufficiency rate in automotive-grade chips is only about 10%, which means that 90% depends on imports. In 2023, more than 90% of chips in China’s automotive industry were imported, with a dependence on computing chips as high as 99%, and a dependence on memory chips as high as 92%.

China is too dependent on foreign countries in Electronic Design Automation (EDA) software and Semiconductor Intellectual Property (IP) Core for chip design. Currently, 95% of IP cores are controlled by American and European companies, and 96% of EDA-related intellectual property rights are controlled by American companies, according to Luo Daojun, deputy director of the Components and Materials Research Institute of the Fifth Institute of Electronics of the Chinese MIIT.

To close this gap, earlier in June this year, in the “Key Points for Automobile Standardization in 2024” issued by the Chinese MIIT, it proposed to accelerate the development of standards for automotive-grade chip reliability and information security. It also proposed the formulation of standards in terms of technical requirements and test methods for intelligent driving computing chips, cellular communication chips, security chips, and electric vehicle power battery management system chips.

In addition to Chinese automotive-grade chip manufacturers, automakers including SAIC, Geely, Great Wall Motor, BYD, Nio, Li Auto, and Xpeng are also actively investing in or developing their automotive-grade chips. For example, in June 2023, SAIC and its subsidiaries and related parties jointly invested 6.012 billion yuan (846 million USD) to focus on the semiconductor supply chain and key technologies related to chips driven by automotive intelligence, electrification, and networking. At that time, SAIC stated that the company was accelerating the localization of chips, striving to exceed 10% in 2023 and 30% in 2025.

Furthermore, automakers including GAC, FAW, XPeng, Deepal, and Li Auto have chosen to establish joint ventures with chip manufacturers. For example, GAC and CRRC Times jointly established Guangzhou Qinglan focusing on research and development of insulated-gate bipolar transistors (IGBT) for new energy vehicles.

By the end of 2024, the scale of China’s automotive-grade chip market is expected to reach 90.54 billion yuan (12.75 billion USD), a year-on-year increase of 6.5%, according to the askci Corporation. As the Chinese automotive industry gradually moves towards a new stage of intelligence, chips are playing an increasingly important role in automotive technological innovation.

Source: East Money, OfWeek, Epoch Times, ChinaEV100, Sohu