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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Tata Motors and PETRONAS Lubricants India have inked a Memorandum of Understanding (MoU) to establish a collection and recycling program for used automotive lubricants.

The two companies will launch the pilot project simultaneously across Maharashtra and Tamil Nadu to evaluate a scalable model for lubricant waste management.

The initiative creates a traceable system for collecting, storing and processing used lubricants through registered recycling channels, with the goal of converting collected waste into re-refined base oil.

Tata Motors will utilise its authorised service centre network to facilitate collection, while PETRONAS Lubricants India will oversee the logistics and transfer of used oil to certified re-refiners. The collaboration aligns with India's Extended Producer Responsibility regulations governing hazardous waste disposal.

Binu Chandy, India Managing Director at PETRONAS Lubricants India, said, "Achieving true circularity in used oil begins when re-refined base oil is reintegrated into finished lubricants. Our collaboration with Tata Motors marks an important step toward building a scalable model for used oil circularity and reflects the strength of our channel network as we work to significantly reduce our carbon footprint across operations."

Vikram Agrawal, Head of Spares and Non-Vehicle Business, Tata Motors, said, "At Tata Motors, practices and partnerships promoting sustainability are integral to advancing circular economy principles and creating meaningful environmental impact across the automotive value chain. Through our collaboration with PETRONAS Lubricants India, we are taking a significant step towards establishing a structured framework for the collection, recovery, and recycling of used automotive lubricants. This pilot initiative aligns closely with our commitment to responsible resource stewardship and supports India's broader sustainability ambitions. By bringing together the complementary strengths and expertise of our two organisations, we aim to assess the viability of a scalable used-oil recycling model that can drive long-term value and contribute to industry-wide progress."

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Sensata Technologies has introduced OmniNode, a power distribution system designed to consolidate high-voltage components for commercial electric vehicles. The platform integrates switching, circuit protection, current sensing, diagnostics, communications and DC charging capabilities into a single unit.

The modular platform targets Class 5 and above battery electric trucks and buses, as well as off-road commercial machinery. By combining contactors, fuses and sensors into a single system, OmniNode claims it replaces setups reliant on multiple discrete components.

The standardised architecture is engineered to reduce integration complexity, shorten OEM development cycles and streamline validation across multiple vehicle platforms.

Brian Wilkie, Executive Vice-President and President of Aerospace, Defense and Commercial Equipment, Sensata Technologies, said, "Commercial vehicle manufacturers are under pressure to scale electrification programs while managing increasing system complexity. With the OmniNode, we are delivering an integrated, off-the-shelf approach that helps engineers simplify power distribution architecture, accelerate development timelines and bring greater consistency and efficiency to vehicle platform design."

The system allows automakers to standardise power distribution hardware across diverse commercial vehicle fleets while maintaining application-specific configurations. The approach aims to reduce engineering overhead and simplify component sourcing for high-voltage commercial vehicle architectures.

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Japanese automakers Nissan Motor Co and Honda Motor Co have entered into a joint development agreement to standardise electronic control units (ECUs) alongside the in-vehicle operating system, middleware and vehicle control software for next-generation software-defined vehicles (SDVs).

The electrical and electronic architecture incorporating the standardised components is scheduled for deployment in next-generation SDVs produced by both companies from fiscal year 2029 onward. The initiative forms part of a strategic partnership between the two automakers targeting carbon neutrality and traffic safety goals.

As per the agreement, Nissan and Honda will establish common technical specifications for multiple core ECUs within the vehicle architecture. The joint development program encompasses the in-vehicle operating system layer along with key elements of the middleware and vehicle control software.

The collaboration is designed to combine engineering resources to increase development speed and achieve investment efficiencies. The partners to reduce individual research and development costs while generating economies of scale across their vehicle lineups by standardising foundational software and hardware layers.

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LG Innotek has expanded its partnership with Zoox to supply camera modules for the serial production of its purpose-built robotaxis. The agreement marks an extension of the multi-year relationship between the two companies as Zoox scales up its autonomous vehicle manufacturing.

It was last year, Zoox opened a serial production facility in Hayward, California, to manufacture its robotaxis and launched a ride-hailing service in Las Vegas.

As per the agreement, LG Innotek will supply high-resolution automotive cameras as part of the robotaxi's sensor suite, which provides 360-degree coverage through overlapping fields of view.

The camera modules feature five fields of view depending on their mounting positions across the vehicle. Built with optical design technology adapted from mobile camera modules, the units are waterproofed to operate under varied environmental conditions. The components are currently being fitted to Zoox robotaxis as part of the vehicle's core perception hardware system.

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