Chip Shortage Eases

Chip Shortage Eases

The global shortage of semiconductors or chips in the aftermath of the Covid-19 led pandemic has eased as per a report by Crisil. A development that led most automakers to cut down production significantly and postpone the launch of new models or to put them to production through 2020, 2021, 2022 and a good part of 2023 has finally eased to iron out any supply chain disruptions that may be there. 

Expected to address and improve predictive demand forecast, the better availability of chips should enable better production schedules. By FY2025-26, Crisil analysts are of the opinion that demand-supply dynamics should be more balance with additional manufacturing capacities getting commissioned. 

With the chips possessing distinct electrical properties that make them the cornerstone of all electronic equipment and devices, it is the auto industry that has come to use them for a variety of functions as automobiles turn increasingly software driven. While the computer and communication equipment (C&C) segment consumes roughly 63 percent of the chips produced, the auto industry consumes roughly 13 percent of them. The other industrial segments consume about 12 percent. 

With new developments such as autonomous and EVs, the use of semiconductors in automobiles is only slated to rise. With passenger vehicles the recipient of most technological innovations ahead of other segments such as two-wheelers, three-wheelers and commercial vehicles, it should not come as a surprise that they consume about 1,500 chips on average – the highest among all automobile types. 

As more advanced electronic features are incorporated, the use for chips increases. The electric passenger vehicles, for example, use almost twice as many chips as internal combustion engine (ICE) passenger vehicles do. The improving supply and slowing demand for computers and mobile phones is therefore looked upon as a blessing in disguise for automobiles and their manufacturers. 

Anuj Sethi, Senior Director, CRISIL Ratings, mentioned, “The chip shortage faced by Indian passenger vehicle makers is easing, with current availability at 85-90 percent of total requirement. The production loss on account of the chip shortage, which had halved to about 300,000 PVs on-year in fiscal 2023, is estimated to have further declined to under 200,000 PVs by the end of September 2023.”

Most passenger vehicle manufacturers are currently operating at near optimal capacity utilisation due to stronger-than-anticipated demand. New orders to be serviced remains high at about 700,000 units at the end of September 2023. 

The easing of chip shortage should help automakers honour new orders with better prediction and faster production. Global automobile demand, severely impacted by the Covid-19 pandemic, made a strong recovery in the latter part of FY2021-22. It caught automobile manufacturers off guard as they had not placed substantial orders for chips. 

The surge in demand for personal computers, laptops and mobile phones, driven by work from home, virtual learning and remote healthcare services, led to a significant chip procurement challenge for the automakers. 

Geographically, the chip ecosystem is skewed, with western nations dominating chip architecture, design, manufacturing equipment, specialised materials and chemicals. Semiconductor fabs1 on the other hand are concentrated in eastern nations, such as Taiwan and South Korea.

Given the criticality of chips in the defense and aerospace industries, the United States and the European Union have offered incentives of about USD 100 billion for localisation of semiconductor fabs. As a result, many global players are slated to spend about USD 360 billion towards setting up new facilities, which would be operational by 2025 and 2026. 

In the Indian context, demand for chips will continue to increase over the medium term, driven by the gradual rise in EV adoption and growing demand for advanced feature-laden ICE vehicles.

Tata Consultancy Services Adds 3 New Engineering Centre In Europe To Strengthen SDV Innovation

Tata Consultancy Services

Tata Consultancy Services, a leading IT services, consulting and business solutions company, has further expanded its capabilities in the rapidly evolving Software-Defined Vehicles (SDV) space with the addition of three new engineering centres in Europe. This marks the firm’s long-term strategy to strengthen its end-to-end automotive software capabilities, chip-to-cloud technologies and services.

The company has set up two new Automotive Delivery Centers in Germany – located in Munich and Villingen-Schwenningen as well as an engineering centre in Romania.

The German facilities the company shared will support automakers in developing and deploying TCS’ software-driven services that cater to autonomous driving, infotainment, safety systems and connected vehicle technologies. On the other hand, the Romanian facility will focus on designing and building advanced automotive software platforms to support early-stage development and innovation.

The new facilities will enable close collaboration with OEMs in Europe and global automotive enterprises.

At present, the company has onboarded over 100 professionals in Europe who will work together with more than 2,000 SDV Engineers across TCS global locations. This diverse and global talent pool will enable the development of next generation automotive platforms for digital cockpits and infotainment, advanced driver assistance systems (ADAS), and other critical SDV functions — supporting the full product lifecycle from concept and development to production and post-launch support.

Regu Ayyaswamy, Senior Vice-President & Global Head, Internet of Things (IoT) and Digital Engineering at TCS, said, “These new centres will position TCS at the forefront of automotive innovation, enabling us to deliver state-of-the-art solutions in autonomous driving and advanced cockpit systems. This expansion reaffirms our commitment to leading the transformation in the Software-Defined Vehicles space.”

Anupam Singhal, President and Business Group Head, Manufacturing, TCS, said, “The shift to software-defined vehicles marks a defining moment for the automotive industry. With the launch of these new centres, we are deepening our commitment to support OEMs in building the next generation of intelligent, connected, and sustainable vehicles. This expansion is a key milestone in our journey toward Future-Ready Mobility — where software, engineering and design, backed by AI, converge to deliver safer, more personalised and continuously enriching experiences for drivers and passengers.”

Maruti Suzuki India Announces Winner Of 9th Cohort of Accelerator Program

Maruti Suzuki Cohort 9

Maruti Suzuki India, the country’s largest passenger vehicle manufacturer, has announced the winners of the 9th Cohort of its flagship Accelerator program.

The winners include six Indian startups: Frinks AI, mistEO, Adagrad, Com Olho, ProSolvr and Eligere and three German startups: Caire AI, Syn2Core and Talonic, under the newly introduced Global Startups category. This marked the first global cohort where a total of 19 startups from India and 7 from Germany participated to showcase their ideas/solutions across domains such as AI, cybersecurity, road safety, quality control, EV charging infra and battery swapping among others.

Hisashi Takeuchi, Managing Director & CEO, Maruti Suzuki India, said, “Startups bring fresh thinking and new ideas. Through the Maruti Suzuki Accelerator program, we have been working with them to co-create future-ready solutions that enhance customer experience and drive operational efficiency in the automobile manufacturing and mobility space. The participation of global startups, this cohort onwards, marks a new milestone in this journey. It further supports our efforts to contribute meaningfully to ‘Make in India’ and ‘Startup India’ initiatives of the Government. We welcome the winning startups to join us in our mission to offer ‘Joy of Mobility’ to as many people as possible.”

Launched in January 2019, Maruti Suzuki India in the last six years, has screened over 5,000 startups, engaged with 150 startups and onboarded 25 startups partners.

Iceptio - Autoware

Shanghai-headquartered Inceptio Technology, a developer of autonomous truck technologies, has joined the Autoware Foundation, a global open alliance for autonomous driving tech.

As part of the understanding, Inceptio will collaborate with members of Autoware Foundation to advance innovation and accelerate the deployment of safe, scalable autonomous truck technologies.

Inceptio's technology portfolio covers L4, L3 and L2+ autonomous driving capabilities. It will leverage its proprietary full-stack Inceptio Autonomous Driving System - which features long-range perception, high-precision tractor and tailer control, fuel-efficient driving algorithm, as well as HPC specifically designed for truck's operating condition. This it shared improves safety, fuel efficiency and operational cost. Using data-driven R&D platform continuously refines core modules in real time, enabling rapid deployment and optimisation of autonomous truck technologies across diverse use cases in trucking.

Launched in 2018, the Autoware Foundation is a non-profit organisation dedicated to supporting open-source collaboration that accelerates the development of autonomous driving technology globally. It counts the likes of Tomtom, Robosense, NXP, Huawei, Hitachi, Capegemini, Foxconn, AMD and Amazon Web Services amongst its members.

Inceptio, on its part, was amongst the first to have launched the industry's first series production autonomous trucks in late 2021. Till date, Inceptio Autonomous Driving System is claimed to have has achieved over 200 million kilometres of commercial operations.

Shinpei Kato, Founder and Fellow, Autoware Foundation said, "We are excited to welcome Inceptio Technology to the Autoware Foundation. Inceptio's proven track record in autonomous trucking and deep industry and production expertise will be invaluable as we work together to build the next generation of autonomous mobility solutions for the trucking industry."

Inceptio will actively participate in the Autoware Foundation initiatives by contributing technology and use cases, exploring new applications, and forging global partnerships.

Julian Ma, Founder & CEO, Inception Technology, added, "We look forward to collaborating with a global open-source community of innovators to accelerate the development of autonomous driving technologies and extend the community's reach deep into truck segment. Our extensive experience in series production and insight from world's largest commercial deployment of autonomous truck uniquely position us to contribute to the Autoware Foundation, driving safer and more efficient logistics worldwide."

Tata Elxsi, Infineon Tech Join Forces To Accelerate Automotive Electrification In India

Tata Elxsi - Infineon Tech

Tata Elxsi, a global leader in design and technology services has signed a Memorandum of Understanding with Infineon Technologies, a leading semiconductor solutions company, to jointly develop application-ready electric vehicle solutions tailored to the Indian market.

The partners will collaborate on design and integration expertise to drive faster adoption of automotive-grade, cost-efficient and safety-compliant subsystems across key mobility segments. This collaboration, the partners stated, aligns with India’s rapid shift towards electrification, with EV sales growing by 25–30 percent year-on-year in 2024, including a 28 percent increase in electric two- and three-wheeler sales.

As part of the understanding, Tata Elxsi will bring its design, system integration and validation capabilities, while Infineon will provide early access to its latest semiconductor technologies – such as silicon carbide (SiC)-based components, microcontrollers and integrated circuits (ICs).

The partners will work closely to develop high-voltage inverters for traction and auxiliary systems, scalable battery management systems (BMS), bi-directional onboard chargers and high-voltage thermal management solutions for the Indian market targeting two-wheeler, three-wheeler, passenger vehicles and commercial vehicle segments. In future, they also look to support eVTOL, energy and off-highway sectors.

Nambi Ganesh, Head – Automotive, Tata Elxsi, said, “Currently, several of our EV solutions are already built on Infineon SoCs and components. This MoU further strengthens our partnership by giving us a clearer scope and tighter system-level alignment, enabling shorter turnaround times to address Indian market requirements. As EV adoption scales, our focus remains on delivering production-ready, automotive standards-compliant platforms and solutions.”

Kenneth Lim, Senior Vice-President – Automotive, Infineon Technologies Asia Pacific, said, “At Infineon, we are committed to driving innovation in the electric vehicle sector and empowering our partners to bring cutting-edge technologies to market. This partnership with Tata Elxsi is a significant step in our journey to support India’s ambitious electrification goals. By combining Tata Elxsi's design and integration expertise with our advanced semiconductor solutions, we are not only enhancing the development of ready-to-deploy EV systems but also ensuring that they meet the highest safety and performance standards. Together, we aim to accelerate the adoption of electric mobility across various segments, from two-wheelers to commercial vehicles, and contribute to a more sustainable future for India.”