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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The Digital Twin Lab, established by the Automotive Research Association of India (ARAI) with Micelio and IIT Guwahati Tech Park, has now become completely operational.

The lab, supported by the Ministry of Heavy Industries (MHI), enables simulation-led development for electric vehicles (EVs) to help startups, MSMEs and car manufacturers accelerate design, validation and deployment. Its capabilities will be showcased at Micelio’s Global Clean Mobility Summit 2025.

The facility uses a ‘Hub-and-Spoke' model, with the hub at ARAI in Pune and two spokes: one at Micelio Discovery Studio in Bengaluru and the other at the Indian Institute of Technology (IIT) Guwahati. It became fully operational in June 2025.

Dr Reji Mathai, Director, ARAI, said, “ARAI is proud to announce the strategic expansion of its Digital Twinning services across India, extending from the western region to the eastern and southern parts of the country. As India advances towards a future of intelligent and sustainable mobility, ARAI remains committed to empowering OEMs, startups, and automotive innovators with cutting-edge mobility solutions. We are grateful to the Ministry of Industries for their continued support in driving technology-led green mobility initiatives. We also deeply value our collaboration with Micelio, our trusted partner in this endeavour and look forward to a successful journey in broadening ARAI’s national footprint.”

The lab offers digital twin modelling for EV components, including battery packs, motors and drivetrains. It provides virtual validation environments that can simulate conditions such as wear-and-tear and energy consumption. This is supported by Hardware-in-Loop testing systems and AI/ML-based simulation tools.

Shreyas Shibulal, Founder & Director, Micelio Mobility, said, "This lab represents a fundamental shift in how India approaches EV innovation. By providing access to advanced digital twin infrastructure, we are reducing time-to-market and development costs, while also enabling a new generation of Indian EV innovators to compete globally while developing solutions specifically tailored to Indian conditions and requirements."

The facility allows startups and MSMEs to validate their concepts and refine designs without large capital investments.

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Tier 1 supplier Sona BLW Precision Forgings (Sona Comstar) has signed a memorandum of understanding (MoU) with NEURA Robotics, Germany to jointly develop technologies, components and sub-assemblies.

The partnership will also focus on the industrialisation of robots and humanoids for the Indian and other agreed markets. The tie-up comes as intelligent automation sees growth in industrial and humanoid robots, driven by developments in artificial intelligence (AI) and falling computing costs. Sona Comstar, which focuses on electric powertrains, will work with NEURA Robotics to provide automation solutions across industries and create products manufactured in India.

Vivek Vikram Singh, MD & Group CEO, Sona Comstar, said, “We are excited to partner with NEURA Robotics to drive the next wave of innovation in industrial and humanoid robotics. This collaboration aligns with our vision to expand beyond the automotive domain, into a broader mobility space, supporting the future of intelligent manufacturing and service industries. By combining Sona Comstar’s engineering and manufacturing expertise with NEURA’s pioneering cognitive robotics technologies, we are well-positioned to deliver world-class solutions for the global market.”

David Reger, CEO and Founder, NEURA Robotics, said, "At NEURA Robotics, we believe true progress in robotics comes from strong partnerships that unite technology, engineering, and purpose. The collaboration with Sona Comstar represents the convergence of two innovation leaders: one redefining mobility, the other reimagining intelligent robotics. Together, we will set new standards for innovation and scalability in one of the world’s most dynamic markets.”

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AJAX Engineering, a leading manufacturer in the construction equipment sector, has begun trialling a new method of connecting digital sales leads with its dealer network using personalised video messages. The project uses the IMPACT platform from AiVANTA to automate the process.

The initiative addresses the challenge dealers face in converting online inquiries, which often lack context. AJAX now sends each incoming lead a short, automated video containing the customer's name, the product they are interested in and contact details for the closest dealer, including a Google Maps link. The videos are available in regional languages and offer quick actions such as calling the dealer, booking a demonstration, or requesting details.

Delivered immediately via WhatsApp and email, the videos allow dealers to respond to customers with context. Early results indicate the communication can improve conversion rates from leads and increase visits to dealerships.

Karan Ahuja, Co-founder and CEO, AiVANTA, said, "Our collaboration with AJAX Engineering demonstrates how personalized, tailored video communication can transform dealer ecosystems. By bringing personalisation and regional accessibility into the lead journey, we are helping OEMs and dealers work in closer alignment to serve customers better."

The move by AJAX reflects a growing trend in dealer-led industries to use digital engagement tools to support physical interactions. By linking online inquiries and dealership visits, AJAX intends to improve customer experience and help dealers achieve sales outcomes.

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Ansys, now part of Synopsys, has formed a strategic partnership with the US-based non-profit Maker Bhavan Foundation (MBF) to enhance STEM education for students at Tier-2 engineering colleges in India.

The collaboration will grant students in MBF’s Tinkerers’ Labs – the supported makerspaces – access to cutting-edge simulation tools from Synopsys’ Simulation and Analysis portfolio, alongside the Ansys Learning Hub. This initiative is specifically designed to provide students in these institutions with resources that match those available at top-tier engineering colleges.

Under the new Synopsys-MBF Simulation Education Program, students and faculty at up to six selected institutions will initially receive academic teaching licences for Ansys' multiphysics simulation solutions.

Damayanti Bhattacharya, CEO, Maker Bhavan Foundation, said, “This collaboration levels the playing field for students who might otherwise be overlooked. Each lab equipped with world-class tools is a promise to these young engineers that innovation has no boundaries of geography or privilege.”

Beyond providing software, Ansys will offer technical mentorship, coordinate hackathons and workshops and support training for both faculty and students. MBF will manage the implementation, acting as the liaison between the institutions and Synopsys to ensure effective tool usage and track learning outcomes.

Mike Yeager, Area Vice-President, India and Japan, at Ansys, part of Synopsys, said, “We are proud to partner with MBF in building a strong talent pipeline for the future. By bringing global technology to local classrooms, we are empowering students in India to innovate and solve real-world problems.”

This initial one-year partnership is viewed as the start of a long-term plan, with both Synopsys and MBF intending to extend the engagement to more institutions if successful, thereby increasing the impact on India’s innovation ecosystem.

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