New Delhi: In a significant shift towards smarter, more sustainable vehicles, the automotive industry is witnessing an unprecedented rise in semiconductor costs. By 2030, the average cost of semiconductor chips per vehicle is projected to double from $600 to $1,200, according to a recent report by NITI Aayog. This substantial increase is driven by the integration of advanced technologies in electric and smart vehicles, which are fast becoming the norm.
The automotive sector’s transformation is underpinned by the adoption of electric powertrains and smart driving features. Electric Vehicles (EVs), equipped with cutting-edge technologies like Advanced Driver Assistance Systems (ADAS), Internet of Things (IoT) connectivity, and Autonomous Driving (AD) capabilities, are leading this shift. These sophisticated features necessitate more advanced semiconductor chips, thereby increasing both demand and cost.
The global shift from traditional fuel-based vehicles to EVs is reshaping the automotive landscape. As cars become more connected and intelligent, they require more sophisticated electronic components. This has led to a growing interdependence between the automotive industry and sectors like electronics, semiconductors, and artificial intelligence (AI). The global automotive component market, valued at approximately $2 trillion in 2022, with $700 billion coming from traded components, underscores the industry’s critical role.
The integration of these technologies not only affects vehicle design but also the broader manufacturing landscape. As the demand for semiconductor chips and advanced components surges, it marks a new era of innovation and collaboration between the automotive and technology sectors.
