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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Tensor, a Silicon Valley-based artificial intelligence firm, has introduced the Tensor Robocar to the United Kingdom at the 5th annual European AV Summit. The vehicle is the first production-ready Level 4 autonomous car designed for personal ownership.

The Robocar features a dual-mode strategy, allowing for both manual and fully autonomous operation. A key hardware innovation is the world's first foldable steering wheel, co-developed with automotive safety supplier Autoliv.

The vehicle architecture is built for full-stack redundancy to meet regional safety and reliability standards. Tensor's engineering utilises agentic AI and adaptive design to manage complex driving environments. The company has established a technical ecosystem through several strategic partnerships:

• Compute and AI: Collaboration with Arm for power-efficient compute platforms and Nvidia for AI processing.
• Infrastructure: Integration with Oracle for cloud systems.
• Manufacturing and Insurance: Partnerships with VinFast for scalable production and Marsh for insurance frameworks.

The UK appearance follows a global launch announcement in August 2025. The European AV Summit served as a platform to engage with regulators, insurers and city planners regarding the implementation of personal Level 4 ownership.

Tensor plans to commence production this year. Initial commercial availability is targeted for the UAE, EU and US markets.

Jay Xiao, Chief Executive Officer, Tensor, said, "Showcasing Tensor at the European AV Summit offered a vital opportunity to demonstrate a production-ready Level 4 vehicle to the policymakers, insurers and industry partners who shape Europe's AV future. Our purpose-built Robocar is engineered for full-stack redundancy providing a level of safety and reliability that combines agentic AI and adaptive design to meet rigorous regional safety standards. Tensor, showing for the first time in the UK, helped translate our technical evidence into practical pathways for safe, consumer ownership across European cities and soon - globally.

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AVL Mobility Technologies, Inc. has joined forces with Ansible Motion to integrate its AVL VSM software with Ansible Motion’s Driver-in-the-Loop simulators. This combination accelerates virtual development, allowing automotive manufacturers and suppliers to significantly cut down on both the time and expense associated with testing and validation.

The AVL VSM platform serves as a versatile real-time simulation tool capable of modelling individual components, entire systems and full vehicles. It enables engineers to evaluate vehicle dynamics and safety under realistic conditions while considering how various attributes and systems interact. This supports a more cohesive approach to optimising vehicle characteristics early in the design process. When paired with an Ansible Motion simulator, users can conduct virtual test drives to refine chassis dynamics, powertrain behaviour and advanced driver assistance systems.

To demonstrate this integrated solution, AVL has installed an Ansible Motion Theta Seat simulator at its Ann Arbor, Michigan, Technical Centre. This setup allows customers to experience the combined VSM and simulator capability firsthand. The impact is amplified when leveraged alongside AVL’s existing Software-in-the-Loop, Hardware-in-the-Loop and Virtual Test Bed technologies within the facility’s Advanced Mobility & Simulation Lab, enabling a seamless transition from virtual models to further development.

Gary Newton, Vice President – Business Development, AVL, said, "By combining AVL VSM with Ansible Motion Driver-in-the-Loop simulators, manufacturers can move critical decisions to the front of the development cycle, dramatically reducing physical prototypes and test iterations. This tool combination can have an enormous impact on timeline and budget. Imagine validating 70+ track scenarios per day in multiple conditions, surfaces and drive events. The result isn’t incremental improvement; it’s months saved and millions preserved."

Salman Safdar, Business Development Director, Ansible Motion, said, "Through our continuing collaborative efforts with AVL, we’re developing new ways to conduct subjective and objective evaluations of qualified concepts much earlier in the vehicle design cycle. Connecting our simulators seamlessly with a feature-rich simulation environment like AVL VSM elevates the virtual vehicle development process for manufacturers seeking to shorten development times, realise cost savings and reduce environmental impacts."

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German technology company AUMOVIO has been awarded the Microsoft Intelligent Manufacturing Award (MIMA) in the ‘Innovate!’ category for its internally developed AI Hub.

The platform, recognised by Microsoft Germany and Roland Berger, integrates artificial intelligence into industrial workflows to assist with tasks ranging from code optimisation to predictive maintenance.

The AI Hub functions as a centralised system that allows employees to deploy and create specialised AI agents. These agents automate routine activities and provide decision-making support across various corporate functions.

Current deployments and use cases include:

• Software Engineering: Monitoring compliance with internal coding standards and guidelines.
• Procurement: Analysis and assessment of commercial contracts.
• Manufacturing: Diagnostic support for maintenance teams to identify technical failures.
• Scale: Over 1,500 AI agents are currently active, serving 21,000 employees globally.

The system integrates with standard office software and engineering tools. It features a built-in code interpreter for dataset analysis and utilises standardised protocols to interact securely with internal applications.

AUMOVIO developed the platform in-house, transitioning from a proof of concept to a company-wide rollout in under 18 months. This internal approach allows the company to maintain control over system architecture, data protection and the integration of emerging AI technologies into industrial environments.

Recent updates to the platform include secure access to local machines and internal servers, enabling agents to provide closer support for daily operations.

Jean-François Tarabbia, Member of the Executive Board and Head of Architecture and Network Solutions, AUMOVIO, said, "Artificial intelligence is fundamentally changing how industrial companies operate. With the AUMOVIO AI Hub, we have created a platform that brings AI directly into our employees’ daily workflows. By combining advanced AI capabilities with deep industrial expertise, we enable our teams worldwide to access relevant information faster, handle complexity more efficiently, and automate routine tasks to create more room for innovation."

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Israel-based autonomous software technology company Mobileye has announced that a US automaker will integrate the Mobileye Driver Monitoring System (DMS) into its future vehicle models.

The programme utilises the EyeQ6L system-on-chip (SoC), with production scheduled to commence in 2027. The agreement expands an existing Advanced Driver Assistance Systems (ADAS) partnership and is expected to encompass millions of vehicles.

The platform unifies interior sensing, including DMS and Occupant Monitoring (OMS), with exterior road perception on a single chip. This integration allows the system to evaluate driver engagement by correlating eye gaze with real-world road conditions.

Key technical objectives include:

• Hardware Consolidation: Running driver monitoring and ADAS perception on one SoC to eliminate the requirement for a separate Electronic Control Unit (ECU).
• Contextual Awareness: Distinguishing between general distraction and active driver engagement by monitoring whether attention corresponds with specific road events.
• Alert Precision: Reducing false alerts and refining takeover requests for higher levels of vehicle autonomy.

The system is designed to meet Euro NCAP 2026 scoring requirements and prepare for the Euro NCAP 2029 protocol, which is anticipated to shift the industry benchmark from basic eye tracking to detection of meaningful engagement.

Nimrod Nehushtan, EVP of Business Development and Strategy, Mobileye, said, “The next generation of intelligent driving demands richer context from every part of the vehicle – the road ahead, the cabin, and the interplay between them. At the same time, automakers are looking to scale advanced driving features across their lineups without the cost penalty of additional hardware or complex system integration. Mobileye DMS delivers on both – running context-aware driver monitoring on a single ADAS chip and ECU platform. This combination is something Mobileye is uniquely positioned for, and we look forward to helping our customers deploy at scale.”

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