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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Bengaluru-based electric powertrain start-up Entuple E-Mobility has raised INR 130 million in a funding round led by Varanium Capital, which also participation from existing investors Blue Ashva Capital, alongside high-net-worth individuals and family offices, including Mohit Oswal, founder of Roop Automotives.

The start-up operates a 25,000 sqft manufacturing plant in Bengaluru, where it produces hub and mid-motor powertrains for two- and three-wheelers. Entuple develops its motors, controllers and firmware in-house without external licensing.

The funding will be used to advance the company's technology stack and expand into new vehicle segments. Key areas of focus include:

• High-Voltage Systems: Development of motors for four-wheelers, buses and trucks.
• Power Electronics: Research and development into new-generation intelligent motor controllers.
• Commercial Vehicles: Engineering powertrains specifically for the heavy-duty commercial segment.

By deepening its indigenous technology, Entuple aims to provide powertrain solutions for original equipment manufacturers (OEMs) in India and international markets.

Rakesh Mishra, Founder and CEO, Entuple E-Mobility, said, “This round enables us to double down on high-voltage powertrain platforms for four-wheelers, passenger vehicles, and commercial vehicles while continuing to strengthen our core IP in motors, power electronics, and controls. We are excited to partner with Varanium Capital and our existing investors as we scale from proven 2W/3W solutions to becoming a key technology enabler for the next generation of EV programs in India and beyond.”

Satya Bansal, Founder & CEO, Blue Ashva Capital, said, “We reinforce our confidence by further participating in the current fund raise. In a market often relying on assembled solutions, Entuple differentiates itself by engineering superior technology fully designed and developed in India. This is one of the best design and engineering teams in the motor and controller space in the country, which was largely dominated by imported or assembled components in India so far.”

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Gujarat-headquartered AI automotive safety solutions company drivebuddyAI has announced its first participation at CES 2026. The company, appearing alongside its parent firm Roadzen Inc., will showcase its Advanced Driver Assistance Systems (ADAS) and Driver Monitoring Systems (DMS) at the Las Vegas Convention Centre.

The company’s technology has recently achieved validation under India’s AIS-184 driver monitoring standard. It also meets the requirements of the European Union’s General Safety Regulation (GSR) 2144 and the EURO NCAP 2026 protocols regarding driver engagement.

The platform utilises a vision-first, closed-loop learning architecture. According to company data, the AI has been trained on 3.5 billion kilometres of driving data. In previous commercial fleet deployments, the system has been credited with reducing accidents by more than 70 percent.

The system functions by:

• Monitoring: Real-time tracking of driver behaviour and engagement.
• Risk Intelligence: Identifying potential hazards and providing alerts.
• Continuous Learning: Updating the AI model as it encounters new driving environments and edge cases.

drivebuddyAI aims to provide safety solutions to automakers and mobility operators as international regulations for vehicle safety become more stringent. By integrating real-time monitoring with risk intelligence, drivebuddyAI seeks to improve safety outcomes for large-scale fleets.

Nisarg Pandya, Founder and CEO, drivebuddyAI, said, “Participating in CES 2026 is a tremendous opportunity for us, and we are excited to be part of the world’s leading technology showcase. CES is where the future of innovation takes shape, and drivebuddyAI is proud to be among the innovators driving that future.”

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TIER IV, a developer of open-source autonomous driving software, has been selected by Japan’s New Energy and Industrial Technology Development Organization (NEDO) to lead an initiative focused on industrial competitiveness.

The project involves the creation of an AI data platform and ecosystem to support the development of autonomous vehicle technology.

The initiative addresses the requirements of end-to-end AI, which relies on large volumes of diverse data. As real-world collection of rare driving scenarios is often restricted by cost and time, TIER IV will utilise multimodal AI to generate synthetic datasets.

The project is structured around three core technical areas:

• Data Collection and Processing: Gathering driving data across various vehicle models and developing automated labelling technologies to improve efficiency.
• Generative AI for Synthetic Data: Developing a multimodal generative AI model compatible with multiple sensors. This system will simulate rare scenarios, such as the moments preceding an accident, across various weather and lighting conditions.
• Infrastructure Development: Building an AI data infrastructure that allows Japanese developers to access high-quality datasets, reducing the development requirements for individual firms.

The platform is intended to standardise data access within the Japanese autonomous driving sector. By combining real-world data with synthetic environments, TIER IV aims to produce training sets that improve the safety and efficiency of autonomous systems.

TIER IV is a founding member of the Autoware Foundation and maintains the world’s first open-source software for autonomous driving. This NEDO-backed project is expected to accelerate the deployment of intelligent vehicles by providing the foundational data required for advanced AI training.

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Taiwan-based XING Mobility has announced it will showcase its immersion-cooled battery technology across three sectors – Electric Vehicles (EV), Energy Storage Systems (ESS) and AI data centres – at CES 2026.

XING Mobility’s technology is featured in Project V, an all-electric sports car from the British brand Caterham. The vehicle uses module-free, cell-to-pack (CTP) immersion cooling to manage thermal loads while maintaining a lightweight profile. A production prototype is scheduled for a global debut at the Tokyo Auto Salon 2026.

Royce YC Hong, Founder and CEO, XING Mobility, said, "When we began building these solutions, the world had not yet fully recognised the problems ahead. As voltage levels and power density continue to rise, the challenge is no longer just about cooled batteries, it is about solving safety, efficiency and system architecture together. XING Mobility’s immersion cooling enables every critical component of the battery system to operate within the same controlled environment, with thermal management fully integrated into the system design. At CES 2026, what we are presenting is a high-voltage power platform centred on ultra-high safety and ultra-high efficiency, capable of simultaneously supporting EV, ESS and AI data centre BBU.”

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