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 International, a subsidiary of Samsung Electronics, has entered into a definitive agreement to acquire the Advanced Driver Assistance Systems (ADAS) business from ZF Group for EUR 1.5 billion.

The acquisition includes ZF's automotive compute solutions, cameras, radars and ADAS software. Approximately 3,750 employees across Europe, the Americas and Asia are expected to transfer to Harman upon completion of the deal, which is scheduled for the second half of 2026.

The move is part of Harman’s strategy to transition towards software-defined vehicles (SDV). By combining ZF’s ADAS technology with its own digital cockpit products, Harman aims to develop centralised compute platforms. This architecture is intended to link safety and assisted driving functions with in-vehicle connectivity and intelligence on a shared platform.

The integration is designed to reduce system complexity for car manufacturers (OEMs), allowing for more efficient innovation cycles and the scaling of context-aware vehicle experiences.

Christian Sobottka, CEO and President, Harman’s Automotive Division, said, “The industry is at an inflection point where safety, intelligence, and in-cabin experience must come together through a unified computing architecture. With this agreement, we take a strategic step to expand our portfolio with complementary ADAS capabilities that unlock a new class of cross-domain experiences ranging from perception-informed audio cues to more personalized, situation-aware driving. Combined with Harman’s long-standing automotive expertise and supported by Samsung’s broader technology leadership, this positions us to help OEMs design the next generation of intelligent, empathetic, and connected vehicles.”

Mathias Miedreich, CEO, ZF Group, said, “With Harman, we have found the ideal partner to fully unlock the growth and innovation potential of our ADAS business. At the same time, this deal makes an important contribution to reducing our company’s debt and allows us to focus our resources on the core technologies in which ZF is a global leader.”

Young Sohn, Chairman of the Board at Harman, added, “Since acquiring Harman in 2017, the company has scaled its automotive and audio business from USD 7 billion to more than USD 11 billion today. Adding ZF’s ADAS capabilities builds on that momentum. Harman will further expand its technology foundation to deliver safer, more intelligent, and more intuitive in-vehicle experiences. This acquisition reinforces Harman’s leadership in the industry’s transformation and underscores Samsung’s long term commitment to the future of mobility.”

Following the close of the transaction, Harman will align its engineering and ADAS teams to accelerate the development of next-generation platforms. The companies have committed to maintaining support for existing programmes during the transition period. Carolin Reichert, Chief Strategy Officer of HARMAN, noted that the deal represents a ‘major milestone’ and demonstrated the company's ability to execute a ‘complex carve-out.’

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Pioneer Corporation has announced it will unveil Pioneer Ride Connect, a user experience (UX) solution for motorcycles, at CES 2026 in Las Vegas. The system is designed for the production of connected clusters and relies on software updates to provide features to riders.

The solution is the result of a technology collaboration with HERE Technologies. It integrates the HERE SDK, a cloud-based mapping and navigation kit covering more than 120 countries, to provide location-based services for the global two-wheeler market.

Pioneer Ride Connect incorporates several technologies intended to manage hardware costs and smartphone battery life:

• BLE-based Screen Projection: The system uses Bluetooth Low Energy (BLE) to project map images and service information from a smartphone onto the onboard cluster. This method reduces the processing power required by the motorcycle's hardware and lowers smartphone power consumption.
• HMI and AI Integration: The platform features Voice Tap, a voice-based Human-Machine Interface (HMI) for hands-free operation. Edge AI is used to share real-time traffic, weather and hazard data.
• Global Navigation: Through the HERE SDK integration, the system provides routing and traffic information optimised for motorcycles. It includes an offline mode for use in areas with limited network connectivity.

The development follows a partnership between Pioneer and HERE Technologies established in December 2024. The HERE SDK allows for the development of location-aware applications featuring routing and geocoding services across Android, iOS and Flutter platforms.

Pioneer stated that the integration of these technologies serves as a foundation for providing connected services to two-wheeler manufacturers and riders globally.

Seiji Tanezawa, Executive Officer of Pioneer, in charge of business development and strategic alliances, said, “Pioneer Ride Connect is a revolutionary platform that continuously provides software-based upgrades to motorcycles’ UX. By combining Pioneer’s industry-leading expertise in designing a compelling UX with HERE Technologies’ globally accessible Location Intelligence platform, Pioneer Ride Connect transforms the concept of smarter and safer connected two-wheelers into a tangible reality. I’m delighted to unveil our leading-edge technology and ambitious vision at the upcoming CES 2026.”

Deon Newman, Senior Vice-President & General Manager, Asia Pacific, HERE Technologies, said, "Pioneer’s ‘Ride Connect’ brings a smarter, safer motorcycle experience to life - and we’re proud to power it with HERE SDK. Together, we’re making connected services accessible to riders across global markets, with reliable navigation and motorcycle‑optimised routing that work in dense cities to remote mountain roads. It's a meaningful step forward for connected mobility.”

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Kinetic Watts & Volts (KWV), the electric mobility arm of Kinetic Engineering, has entered a technology partnership with Jio Things, a subsidiary of Jio Platforms.

The collaboration will integrate voice-assisted controls, IoT-enabled digital clusters and connected vehicle technologies into Kinetic’s upcoming electric two-wheeler range.

The partnership aims to deploy a suite of digital features for Indian riders, utilising Jio’s IoT ecosystem, which includes hardware, cloud infrastructure and device management.

The collaboration will introduce several capabilities to the Kinetic EV platform:

• Voice Assistance: Interaction for vehicle functions.
• Smart Clusters: Digital instrument panels providing real-time data and infotainment.
• Telematics: Cloud-based analytics for performance monitoring and diagnostics.
• Fleet Management: Tools for commercial operators to track and manage vehicle assets.

The connected platform will be embedded across future KWV models to provide a standard digital experience across different customer segments.

Ajinkya Firodia, Vice-Chairman & Managing Director, Kinetic Watts & Volts, said, “Kinetic has always stood for democratizing mobility and innovation. With this partnership, we now extend that commitment into digital mobility, bringing voice assistance and connected features to everyday riders, so technology becomes truly intuitive and useful. This collaboration also stays true to our motto of ‘Easy’ a philosophy already visible in practical features such as Easy Key, Easy Flip and Easy Charge; and now strengthened with seamless digital experiences that simplify ownership for our customers.”

Ashish Lodha, President, Jio Platforms, said, “Our partnership with Kinetic exemplifies our vision to build a truly connected automotive ecosystem in India. By bringing Jio’s voice assistance and IoT capabilities to the two-wheeler segment, we are not just upgrading vehicles; we are redefining the interaction between man and machine, bringing the benefits of smart mobility to every Indian rider.”

The partnership seeks to combine Kinetic’s manufacturing experience with Jio’s digital infrastructure to make connected electric vehicles more accessible. Objectives include improving rider safety, increasing digital uptime and providing data analytics for fleet operators.

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AION-Tech Solutions has signed a Memorandum of Understanding (MoU) with Theoremus AD, a Bulgarian company specialising in transport orchestration, to develop urban mobility solutions in India.

The partnership will begin with First–Middle–Last Mile (FMLM) mobility integration pilots in Telangana and Karnataka. These pilots will focus on demand-responsive electric vehicle (EV) feeder services connected to metro and bus corridors.

The collaboration involves the deployment of a multimodal transport orchestration platform. This system integrates metro rail, bus networks, EV fleets, parking infrastructure and mobility data into a single framework. The platform uses AI and data for demand forecasting, EV utilisation, congestion management and operational visibility.

During the pilot phase, EV fleets will use data and analytics to manage routing, charging, and service planning. Performance will be monitored through indicators such as ridership, fleet utilisation, and carbon reduction.

Chanakya Bellam Radhakrishna, Director, AION-Tech Solutions, said, “This collaboration marks an important step in our mission to build intelligent, integrated, and scalable mobility ecosystems for Indian cities. By combining Theoremus AD’s global orchestration expertise with the on-ground execution capabilities of our subsidiaries, ETO Motors and ROQIT, we aim to strengthen first–middle–last mile connectivity and deliver measurable sustainability outcomes.”

AION-Tech Solutions will manage execution through two subsidiaries:

• ETO Motors: Will deploy and operate the EV fleets for the pilots.
• ROQIT: Will provide digital platforms, control dashboards and visibility tools for transport authorities.

Hristo Popov, CBO, Theoremus AD, said, “India is one of the most dynamic and complex urban mobility markets globally. Partnering with AION-Tech Solutions enables us to localise our platform and deploy real- world pilots that showcase the impact of integrated data, AI-driven optimisation and coordinated EV operations at scale.”

Following the pilots, the partners intend to engage with transport and urban development agencies to expand the solution. Target organisations include TSRTC, HMDA, and HMRL in Telangana, and BMTC, BMRCL and DULT in Karnataka. The project will operate under Indian data residency and cybersecurity frameworks.

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