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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Pre-owned car marketplace Cars24 has announced the launch of AI Labs, a dedicated initiative designed to develop artificial intelligence-native products and support early-stage entrepreneurs.

As part of the program, the company has committed a USD 20 million investment fund targeted at startups and development teams building transformative AI technologies.

The move marks an expansion of Cars24’s internal technology strategy, where machine learning and artificial intelligence models have already been integrated into core business operations to manage decision-making workflows and customer experience interfaces. Through AI Labs, the company will extend its technical resources externally to independent software engineers and startup founders.

To establish the infrastructure for the program, Cars24 has partnered with technology providers including OpenAI, Amazon Web Services (AWS) and ElevenLabs. This ecosystem will provide participating developers with cloud infrastructure, technical expertise, distribution networks and advanced language and voice synthesis models to accelerate product deployment.

The operational focus of AI Labs is divided into three primary activities:

• Build: Developing proprietary AI-native applications and contributing to global open-source software innovation.
• Partner: Collaborating with established artificial intelligence firms to encourage industry experimentation and technology adoption.
• Invest: Supplying seed capital and strategic support to early-stage businesses building software categories.

Beyond direct equity investments, the initiative will fund community engagement programs, including regional hackathons, builder incubation programs and collaborative open-source projects designed to stimulate developer experimentation.

Vikram Chopra, Founder and CEO, Cars24, said, “Every major technology shift creates a handful of companies that go on to define the future. We believe AI is the biggest shift of our generation, and the opportunity ahead is far larger than anything we've seen before. Over the last few years, we've seen AI fundamentally change how we operate, build products, and serve customers AI Labs is our way of giving back to the ecosystem that is shaping this future. We want to back founders early, help them move faster and support the people building things that seem impossible today but inevitable tomorrow.”

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Automotive supplier Valeo and Electronic Design Automation software provider Zuken have announced a strategic partnership to develop an open, artificial intelligence-assisted electronic design platform. The collaboration will operate under a joint program named the ‘Zuken Valeo InnoLab’.

The initiative integrates Zuken's AI architecture with Valeo’s custom AI agents and industrial data to create a real-time collaborative ecosystem between software tools and engineers. The primary objective of the program is to reduce hardware design timelines while maintaining structural robustness across complex automotive electronic systems.

The technical development framework spans the entire electronic design flow and is organised into four main operational areas:

• Functional Generative Design: Valeo will deploy its generative AI models within Zuken’s System Planner software to instantly generate and evaluate multi-criteria system architectures based on predefined corporate standards.
• Digital Continuity: Zuken’s open architecture will interface with Valeo’s existing digital ecosystem to provide end-to-end data traceability. This integration is designed to comply with the Automotive SPICE 4.0 (ASPICE4.0) Hardware Engineering process group standard, allowing Valeo's AI to process data and execute automated actions directly within the platform.
• Assisted Detailed Design: Valeo will integrate virtual AI copilot agents to assist engineering teams in real time with hardware rule verification, solution searching, and constraint implementations. Concurrently, Zuken is developing native AI functions to accelerate schematic entries by drawing from Valeo’s standardised components database.
• Automated Placement and Routing: Physical circuit integration will utilise Zuken’s Design Force engine, which features automated placement and routing algorithms. Valeo will use Zuken's software development kit to train the AI engine against specific automotive environmental and physical constraints to achieve correct initial executions.

Christophe Le Ligne, Vice-President – Research and Development, Valeo, said, “For Valeo, Zuken is much more than a software provider; it is a true innovation partner. The power of Zuken’s AI roadmap, combined with the exceptional openness of its architecture, allows us to hybridise our own artificial intelligence tools with their engine. This win-win partnership is the best way to tackle the challenge of automotive complexity by slashing our design times while guaranteeing 100% robustness.”

Ryosuke Takagi, Executive Officer and General Manager – R&D Division, Zuken, added, “Our vision at Zuken has always been to provide intelligent tools that adapt to our customers’ most complex challenges. Collaborating with a technological leader like Valeo pushes our ‘Autonomous Brain’ roadmap to its highest level of performance. By opening our System Planner, Design Gateway, and Design Force solutions to Valeo’s AI agents, we demonstrate that the true power of AI in engineering lies in the alliance between a high-performance software engine and expert industrial know-how.”

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Artificial intelligence software developer Helm.ai has launched two foundation models, GenSim-3 and VidGen-3, establishing a native Full HD (1920x1080) resolution standard for generative simulation across a 6-camera, 360-degree surround-view suite.

The architecture delivers 5x the pixel density of industry benchmarks to assist automotive developers facing the limitation where physical collection of edge cases becomes logistically restrictive.

Traditional generative world models typically cap resolution at roughly 0.4 megapixels per camera. Helm.ai’s platform outputs a native 2 megapixels per camera, yielding a synchronised 12-megapixel synthetic canvas per timestep. This specification matches the hardware parameters of production-grade vehicle cameras to reduce the domain gap for SAE Level 2 through Level 4 autonomous vehicle development.

The platform functions as a virtual sensor twin by mathematically replicating physical constraints and hardware anomalies, including lens flares, sensor banding patterns, and exposure blinding. To accommodate different neural network training routines, the pipeline can be configured to a high-speed validation mode using a three-camera setup at 30 frames per second, or a spatial context mode generating a six-camera surround view at 5 frames per second.

Data generation is split into two operational pipelines. GenSim-3 focuses on data augmentation by modifying environmental parameters such as weather, lighting, and object surfaces across real-world video segments at native 2MP resolution. VidGen-3 focuses on data creation, synthesising driving sequences from scratch by simulating environments, agent behaviours, and traffic logic without baseline video to patch geographic data gaps.

Helm.ai achieved the 2MP standard using a cluster of a few hundred GPUs rather than the thousands typically required for sub-HD video generation. This framework reduces the GPU infrastructure footprint for vehicle manufacturers and provides a method for compressing autonomous driving software onto mass-market on-vehicle compute chips.

Vladislav Voroninski, CEO and Founder, Helm.ai, said, "We are moving the industry from standard 'AI video' to authentic, hardware-accurate sensor emulation. By leading with a Full HD (2MP) standard and a 12-megapixel total aggregate capability per timestep, we have solved the resolution bottleneck that has historically limited the utility of generative AI in safety-critical systems. By optimising our compute architecture, we are giving our partners a high-performance platform to validate their autonomous stacks using synthetic data that perfectly matches the fidelity of their actual production sensors."

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Global automotive technology supplier Marelli has marked the 30th anniversary of its flagship electronics manufacturing plant in Guangzhou. Established in 1996 as Marelli’s inaugural manufacturing investment in China, the facility has transformed from a baseline assembly outpost into a major smart manufacturing and hardware-software validation centre.

Over the past three decades, the facility has expanded from a single operational production line with approximately 100 technicians into a 30,000-square-meter automotive electronics campus.

Today, the facility employs nearly 1,000 people and runs 66 active production lines, manufacturing components for both localised Chinese vehicle programs and global vehicle architectures.

The campus houses an adjacent, fully integrated Engineering Center that holds more than 100 registered patents. The manufacturing framework integrates high-precision assembly lines, automated optical bonding modules and site-wide rooftop solar arrays designed to manage factory energy overheads and lower operational carbon density.

The Guangzhou plant functions as a strategic industrialisation hub focused on low-cost, scalable architectures suited for the industry transition toward connected, software-defined vehicles (SDVs). The facility specialises in several high-growth hardware and display segments like advanced display solutions based on Mini-LED and MicroLED technologies. Additional key platforms include electronic control units (ECUs) for body and seat systems, zone control units, as well as digital cockpits, digital instrument clusters, and 5G telematics systems.

Ravi Tallapragada, President of Marelli’s Electronics business unit, said, “Our Guangzhou plant is a cornerstone of Marelli’s Electronics business in China and a powerful example of how innovation and advanced manufacturing can drive sustainable growth. Over the past 30 years, the team has continuously evolved its capabilities, developing advanced technologies and scalable platforms that address the rapid transformation of the automotive industry, building on long-standing collaboration with customers and partners. I’m proud of our team in Guangzhou and confident that the plant will continue to play a key role in shaping Marelli’s future globally.”

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