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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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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NXP Semiconductors has announced a collaboration with Quanta to launch a deterministic zonal networking solution designed for next-generation Software-Defined Vehicle (SDV) architectures.

The platform combines NXP’s S32 automotive processing platform with TrustMotion’s MotionWise middleware to provide predictable, real-time communication across vehicle networks.

The solution is engineered to solve a primary challenge for automotive manufacturers: ensuring precise timing across distributed compute and network components. By providing end-to-end determinism, the platform reduces the risk of errors during late-stage system integration.

The solution features an automated workflow for topology discovery and schedule generation designed to accelerate SDV program timelines. It combines NXP S32 processors, SJA1110 TSN-enabled switches and multi-PMIC power management into a single, validated system.

It provides low jitter and predictable latency across Electronic Control Units (ECUs) and in-vehicle networks, supporting Quality of Service (QoS). Thus making it scalable to support latency-sensitive applications including audio over Ethernet, high-performance compute (HPC) integration and real-time control.

Sebastien Clamagirand, SVP and GM, NXP Semiconductors, said, “Software defined vehicles require a fundamentally different approach to vehicle architecture – one that delivers deterministic timing across both compute and network at scale. We are helping OEMs overcome the limitations of legacy architectures, reduce integration risk and accelerate development of scalable zonal systems.”

Terrisa Chung, Vice-President and General Manager, Quanta, added, “Quanta’s Adaptive Zonal System is designed to deliver deterministic performance and system level scalability for next generation vehicle platforms. Working with NXP, we’re providing a ready to deploy foundation that helps our customers move faster while meeting strict timing, safety, and reliability requirements.”

The partnership aims to streamline the transition from domain-based designs to zonal E/E systems. NXP and Quanta have also confirmed they are working toward aligning this solution with the NXP CoreRide zonal reference system to support broader SDV integration in future vehicle programs.

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Aptiv has announced that Volvo Cars has awarded its Gen 8 radar platform for deployment in future vehicle programs, with production scheduled to begin in 2028.

The partnership centres on enhancing the perception capabilities of Volvo’s Advanced Driver Assistance Systems (ADAS) as both companies shift toward software-defined architectures.

The Gen 8 platform is Aptiv's latest advancement in high-resolution sensing, utilising proprietary antenna and silicon designs to support AI-powered and machine learning-powered safety functions.

Key Capabilities of the Gen 8 Radar Platform:

• High-Resolution Perception: Superior angular measurement and discrimination allow the system to resolve complex driving scenarios with high precision.
• Environmental Robustness: Engineered to maintain high performance in adverse weather and challenging urban environments where traditional sensors may struggle.
• Sensor Fusion Optimisation: Designed for seamless integration with cameras and other perception layers, providing a more reliable "world model" for the vehicle's computer.
• Scalability: A modular architecture that allows Volvo to deploy the technology across various vehicle lines and global markets efficiently.

Alwin Bakkenes, Head of Software Engineering at Volvo Cars, said, “Volvo Cars has always been guided by a belief that safety should be designed around people and real‑world driving conditions. Aptiv’s Gen 8 radar platform helps us deliver even more robust perception capabilities to our advanced driver assistance systems across increasingly complex environments and driving scenarios.”

Matthew Cole, Senior Vice President, Sensors & Compute at Aptiv, added: “Volvo Cars’ commitment to protecting people inside and outside the vehicle has set the benchmark for automotive safety. Aptiv’s Gen 8 radar was designed with that same purpose in mind: delivering dependable, high-resolution perception that performs in a wide range of use cases and environmental conditions. We’re proud to support Volvo Cars as they continue advancing their safety ambitions across future vehicle programs.”

The collaboration reinforces Volvo Cars' long-term safety mission – aiming for a future with zero accidents, while positioning Aptiv as a primary technology partner in the evolution of intelligent, software-led vehicle safety systems.

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