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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European automaker Stellantis has announced a strategic initiative with Accenture to deploy artificial intelligence (AI)-enabled digital twin capabilities across its global manufacturing network using Nvidia technologies. The project focuses on creating virtual manufacturing environments powered by real-time data and physical AI.

The collaboration integrates Stellantis's automotive infrastructure, Accenture’s digital manufacturing engineering and Nvidia’s accelerated computing platforms and Omniverse libraries.

The system uses virtual factory replicas to validate manufacturing processes prior to physical installation, track metrics for quality control and conduct predictive monitoring.

Initial testing and deployment of the digital twin infrastructure are scheduled to begin with pilot programmes in North America in 2026. The long-term objective is to evaluate scalability across the carmaker's international plant footprint to establish a predictive manufacturing model.

Francesco Ciancia, Head of Manufacturing, Stellantis, said, “We are laying the foundation for the next generation of manufacturing at Stellantis. By combining digital twins, AI and advanced simulation, we are rethinking how we design, operate and continuously improve our production systems. This initiative is designed to work hand in hand with our teams, enhancing their ability to anticipate issues, enabling faster decisions and continuous improvement. Together with Accenture and NVIDIA, we are exploring new ways to drive more scalable and intelligent operations.”

Tracey Countryman, Supply Chain and Engineering Global Lead, Accenture, added, “The opportunity in manufacturing today is to scale AI across complex industrial operations in ways that deliver measurable business value. By partnering with Accenture and harnessing Nvidia’s compute and simulation technologies, Stellantis is positioned to accelerate manufacturing reinvention and lead the industry into a new era of intelligent, high-performance operations.”

The computational framework is built to enable closed-loop optimisation, a process where physical assembly lines and virtual systems continuously exchange data to improve performance. The architecture supports automated throughput adjustment, maintenance scheduling and software-defined factory operations.

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Epsilon Advanced Materials (EAMPL) has developed a hard carbon anode material designed for sodium-ion batteries used in grid-scale Energy Storage Systems (ESS). Developed through internal research and development, the graphite-free material provides an alternative for cell manufacturers as sodium-ion chemistry gains adoption due to the abundance of sodium and its lower environmental footprint compared to lithium extraction.

The material utilises coconut shell waste as its primary carbon precursor. Through pyrolysis and high-temperature carbonisation, this agricultural byproduct is converted into a disordered carbon structure with the interlayer spacing and nanopore architecture required for sodium-ion storage.

This bio-based manufacturing process eliminates dependence on graphite and reduces carbon dioxide emissions by up to 50 percent compared to standard graphite anode production due to lower processing temperatures.

The microarchitecture of the hard carbon anode provides reversibility, cycle life, and charge-discharge capabilities required for grid applications undergoing repeated charge cycles.

The product launch follows commitments to sodium-ion cell production by global manufacturers, including CATL, alongside expanding research by cell manufacturers across Asia and India seeking components for energy storage systems.

Vikram Handa, Managing Director, Epsilon Group, said, “The clean energy transition needs materials that are affordable, available and easy to scale, faster. Sodium-Ion is the right chemistry for energy storage and Hard Carbon is the right anode for it. The feedstock is something India has in abundance, the process is cleaner than anything that came before it, and the performance is where it needs to be for real-world grid applications. We are building for what energy storage will look like ten years from now.”

The introduction of the hard carbon anode is part of Epsilon Group's expansion into battery materials, which also includes silicon-graphite anodes and Generation III Lithium Iron Phosphate (LFP) cathode active materials for lithium-ion applications. The expansion aims to establish manufacturing and export capabilities for battery components within India to support energy storage and electric vehicle sectors.

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French automotive supplier Valeo has been nominated by a major Indian automotive manufacturer to supply its Valeo Smart Safety 360 (VSS360) system for commercial vehicles.

The advanced driver assistance system (ADAS) is designed specifically for the Indian market and will be produced at Valeo's manufacturing facility in Sanand, Gujarat.

The VSS360 is a ‘one-box’ ADAS solution that integrates radar fusion directly into a smart front camera. This design allows vehicle manufacturers to remove individual Electronic Control Units (ECUs), reducing costs and simplifying integration into existing vehicle architectures.

A significant technical feature of the system is the Univolt Camera, which is compatible with both 12V and 24V electrical architectures, allowing it to be used in vehicles ranging from Light Commercial Vehicles (LCVs) to heavy-duty trucks.

The system utilises three radars and one camera to provide a suite of safety and comfort functions, including:

• Moving Off Information System: Protects pedestrians and cyclists during vehicle pull-away.
• Blind Spot Information System: Monitors side zones for vulnerable road users.
• Standard ADAS Functions: Includes Forward Collision Warning, Automatic Emergency Braking, and Lane Departure Warning.
• Driver Monitoring: Software that detects driver drowsiness and fatigue to mitigate accident risks.

The system has been tailored to meet upcoming General Safety Regulations in India and handles unpredictable traffic conditions common on Indian roads. It also supports over-the-air (OTA) updates to maintain software performance throughout the vehicle's lifecycle.

Marc Vrecko, CEO, Valeo Brain Division, said, "This award demonstrates how our high-end ADAS technology can perform in the world’s most demanding environments while drastically improving road safety. India is a cornerstone of our 'Elevate 2028' strategy and Valeo is committed to providing high-tech, scalable, and cost-optimised safety solutions that meet the specific requirement of Indian roads."

Jayakumar G, Group President & Managing Director, Valeo India, added, "This award marks an important milestone in expanding our ADAS portfolio in the commercial vehicle segment in India. By localising these advanced solutions, we aim to deliver highly competitive products tailored to our customers’ needs. Regulatory momentum is a key driver accelerating ADAS adoption and supporting our journey towards safer and smarter mobility in India."

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Hyundai Motor Group has expanded its Center of Excellence (Hyundai CoE) in India by forming a consortium with 7 universities to conduct research into battery and electrification technologies.

This initiative adds IIT Kanpur, IIT Hyderabad, VNIT Nagpur and Tezpur University to the existing partnership established in 2025 with IIT Madras, IIT Delhi and IIT Bombay.

The Group is managing 39 joint projects through these institutions, focusing on battery cell safety, energy density and diagnostic systems. Research is specifically directed toward battery designs and materials intended for the Indian environment.

Technical work also includes the development of an AI-powered Vehicle-to-Grid (V2G) platform and advancements in Battery Management Systems (BMS).

To facilitate technical exchange, the Group has introduced a Korea Visiting Programme for researchers and a series of global conferences and forums. These programmes are designed to connect government, industry, and academic leaders to discuss emerging electric vehicle (EV) technologies and share technical insights between India and Korea.

Chang Hwan Kim, Head of the Electrification Energy Solutions Tech Unit, Hyundai Motor Group, said, “By bringing together the distinguished professors and emerging researchers from these seven institutes, we can create powerful synergies that will yield immense value for both Hyundai and India's sustainable growth. I strongly believe that the Hyundai CoE will grow to become the premier expert network of the Indian academic community”.

The long-term objective of the project is to establish a research hub that provides solutions for the domestic automotive industry and supports the transition to electric mobility through local talent and institutional expertise.

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