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.

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HARMAN has partnered with Tata Motors Passenger Vehicles (TMPVL) to provide the in-cabin technology for the all-new Tata Sierra. The collaboration introduces 5G-ready connectivity and a multi-speaker audio system to the SUV, marking an expansion of the 12-year relationship between the two companies.

The vehicle features HARMAN Ready Connect, a suite of telematics control units (TCUs) manufactured at HARMAN’s facility in Pune. The system utilises a modular network access device architecture, allowing for a transition from 4G to 5G technology. It supports safety functions such as emergency calling, stolen-vehicle tracking and roadside assistance, alongside productivity features like video conferencing and high-definition streaming.

The interior includes a Horizon View Display and a digital instrument cluster powered by HARMAN’s infotainment architecture. The system supports gaming with joystick compatibility and features a Ready Link Marketplace, which allows users to download third-party Android applications.

For driver assistance, the Sierra incorporates a Surround View System (SVS) and 4sight Blind-Spot Monitoring. Navigation is provided through a native mapping solution from MapmyIndia. The cabin experience also includes ‘Relax Mode’ for sensory visuals and 'Silent Mode' to mute non-regulatory alerts.

The SUV introduces a 12-speaker JBL audio system, which includes an enclosed subwoofer and a soundbar. This configuration supports Dolby Atmos and represents a first for an Indian manufacturer. The integration of these components is intended to provide a multi-dimensional sound profile tailored to the vehicle's cabin.

By localising the production of the telematics hardware in India, HARMAN aims to provide TMPVL with greater supply-chain agility and shorter development cycles. The ‘Make-in-India’ initiative for Ready Connect ensures the technology is adapted to local driving conditions and consumer requirements.

Suman Sehra, VP, Portfolio Management, Connectivity at HARMAN International, said, “HARMAN Ready Connect represents the shift toward software-defined, experience-led mobility, and the new Tata Sierra is a perfect expression of that evolution. By collaborating closely with TMPV’s R&D team, we focused on value co-creation and delivered a platform that brings high-performance connectivity, scalable architecture, and future-ready digital services to support the connected digital life.”

Mohan Savarkar, Chief Product Officer, Tata Motors Passenger Vehicles, added, “With the Sierra, our focus was to create a cabin experience that feels as advanced and intuitive as the world our customers live in. Connectivity, digital interfaces and audio are no longer add-ons—they define how people engage with their vehicle every day. Our collaboration with HARMAN enables us to deliver a future-ready architecture, immersive in-cabin experiences and premium audio.”

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Sterling Tools has entered into a partnership with MINIEYE, a Hong Kong-listed developer of intelligent driving and in-cabin solutions. The collaboration focuses on the deployment of Advanced Driver Assistance Systems (ADAS) and Driver Monitoring Systems (DMS) tailored specifically for the Indian automotive market.

As per the agreement, Sterling Tools will lead application engineering and on-ground adaptation. This involves tuning perception algorithms to account for Indian road scenarios, traffic patterns, and environmental conditions. The project aims to ensure that safety technologies, such as Autonomous Emergency Braking (AEB) and Lane Departure Warning Systems (LDWS), function reliably in local settings rather than relying on global configurations.

The partnership is positioned to meet upcoming Indian safety mandates. Effective 1 January 2027, regulations will require the fitment of ADAS and Driver Drowsiness and Attention Warning Systems (DDAWS) in new vehicle models. The scope of the collaboration covers both commercial and passenger vehicles, including technologies for Forward Collision Warning (FCW) and Blind Spot Monitoring.

MINIEYE provides technology that complies with EU General Safety Regulations and holds Automotive SPICE V4.0 CL3 certification. Sterling Tools is supporting this transition as part of a broader expansion into electronics and safety-critical components, which includes electric vehicle power electronics and motor solutions.

Anish Agarwal, Director, Sterling Tools, said, “Road safety and regulatory compliance are becoming increasingly important across both commercial and passenger vehicle segments in India. This collaboration allows us to work with a global technology partner to address the growing need for driver assistance and monitoring systems that are engineered for Indian operating conditions. At Sterling Tools, our focus remains on supporting OEMs with engineered, safety critical technologies aligned with upcoming regulatory requirements.”

Dr Liu Guoqing, Founder and Chairman, MINIEYE, added, “Partnering with Sterling Tools marks a vital step in bringing intelligent driving to India, leveraging Sterling Tools local expertise to translate technology into production-ready applications that enhance vehicle safety.”

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Faraday Future Intelligent Electric Inc. has released technical details regarding the Front AI Communication Ecosystem (F.A.C.E.), a system featured on the electric version of its FX Super One MPV.

The technology replaces the traditional front grille with a display and an AI avatar designed to act as a co-pilot and communication interface.

The system utilises multimodal interaction, including voice, gesture and touch, to respond to user needs. It is controlled via a smartphone application, allowing for the display of custom graphics, logos and streaming video while the vehicle is stationary. The hardware incorporates sensors that enable the AI agent to perceive its surroundings and interact with individuals outside the vehicle.

The F.A.C.E. system uses a Large Language Model (LLM) reasoning layer to interpret user intent and execute actions. Its functionality includes role-awareness personalisation, which distinguishes between owners, family members and unknown persons to provide appropriate responses.

The system supports proactive communication, such as initiating responses when someone approaches the vehicle to improve safety. Users can also interact with the vehicle’s voice assistant from the exterior to check status or request access. The FX Super One platform is engineered to support both battery electric and AI hybrid extended range (AIHER) powertrains.

The FX Super One is positioned as a mass-market MPV for the United States. Faraday Future has established a three-stage delivery structure for the model:

• Phase One: Deliveries to FX Partners are expected to begin in the second quarter of this year.
• Phase Two: B2B partner deliveries and production ramp-up are scheduled for the third quarter.
• Phase Three: Full-scale consumer market deliveries are targeted for the final quarter of this year or the first quarter of 2027.

Max Ma, Global CEO, FX, said, “Offering technology like our unique F.A.C.E system in a new category of vehicle will be a game changer in the marketplace. It will allow users to connect with the world in a totally new way. It can express itself and communicate to the world in a way never seen before in a vehicle. The FX Super One is not just a new MPV, it is the first mass-market, first-class Embodied AI MPV designed for the U.S. market, where intelligent space, AI interaction, sensing, computing and power and extended-range capability come together in a single platform.”

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German component supplier Schaeffler is leading the ReDriveS research project, an initiative funded by the German Federal Ministry for Economic Affairs and Climate Action. The project, which includes 25 partners from industry and academia, aims to develop an automated and scalable recycling concept for electric axle drive systems.

The project has a volume of over EUR 25 million, with funding exceeding EUR 16 million over a 36-month period. The technical focus is on robot-guided disassembly to recover materials such as rare earths, copper, aluminium and steel. This approach is intended to support the repair of drives, the reuse of subcomponents, or the recycling of materials to meet statutory requirements and secure supply chains.

A central component of the project is the development of a digital twin that processes data throughout the lifecycle of an axle drive. This digital model assesses the condition and geometry of units to determine whether they should be dismantled into main components – such as the motor, inverter, or transmission – or broken down further for material recycling.

The system is designed to be manufacturer-independent, allowing the technology to be used as an industry solution for original equipment manufacturers (OEMs) and recyclers. The project also explores data-based business models for axle drives enabled by this digital ecosystem.

Prof. Dr. Tim Hosenfeldt, Head of Central Technologies at Schaeffler, said, “With ReDriveS, we are launching a key project for the circular economy in electric mobility as consortium leader, together with the German Federal Ministry for Economic Affairs and Energy and strong partners. Our goal is to make electric axle drives significantly more resource-efficient through digital twins, automated disassembly and high-quality recycling – thereby securing raw materials and supply chains, reducing CO2 emissions, and strengthening Germany as a location overall.”

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