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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European ride-hailing platform Bolt has selected the NVIDIA Alpamayo Stack autonomous driving software to operate its vehicle fleet in Europe, starting with Lucid automobiles.

The deployment commences in Madrid in 2027, with subsequent deployment planned in Germany and France. The initiative supports the integration of at least 25,000 Level 4-ready Lucid vehicles equipped with NVIDIA Hyperion compute and sensor architecture. The program contributes to Bolt's objective of deploying 100,000 autonomous vehicles across Europe and the UNECE region by 2035. The system integrates reasoning artificial intelligence with perception and planning modules alongside NVIDIA Halos safety controls.

Jevgeni Kabanov, President and Head of Autonomous Driving, Bolt, said, “Autonomous driving will change how people move around cities, and Europe should play a major role in how that future is built. Our ambition isn't to bring autonomous driving to just a handful of cities. We want to make autonomous ride-hailing available at scale across Europe, with 100,000 vehicles on our platform by 2035. We're bringing together some of the best technologies in the world to make that possible. Following our first autonomous mobility launch in Luxembourg, our next step with NVIDIA and Lucid is to begin a programme in Madrid in 2027. The Region of Madrid is pioneering a structured framework for commercial autonomous mobility in coordination with national authorities. Germany will also be a priority for what comes next, with cities already setting out clear ambitions for autonomous mobility.”

Rishi Dhall, Vice-President of Automotive, NVIDIA, said, “Robotaxis will scale when every vehicle is built on a common, safety-engineered foundation. NVIDIA Hyperion standardises the compute and sensor architecture across vehicle platforms, while NVIDIA Alpamayo Stack and Halos provide the driving intelligence and safety foundation. Bolt’s European platform, operational experience and work with cities and regulators make it a strong partner to bring autonomous ride-hailing to market at scale in Europe.”

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French tier 1 supplier Valeo has announced plans to develop and industrialise high-performance compute platforms utilising the NVIDIA Hyperion reference architecture and NVIDIA Halos safety system.

The initiative combines Valeo's vehicle integration capabilities with centralised computing architectures to support software-defined mobility systems. The platform utilises the NVIDIA DRIVE AGX Thor architecture to deliver processing performance and redundancy for Level 4 autonomous driving, commercial trucking and robotaxi applications. The development framework enables automakers to integrate features and deploy autonomous technologies across vehicle models.

Marc Vrecko, Chief Executive Officer, Valeo Brain Division, said, "Our work with NVIDIA marks a significant milestone in our mission to make autonomous driving a safe, scalable reality. By seamlessly integrating NVIDIA’s advanced compute power into our next-generation platforms, we are delivering the flexible, centralised intelligence vehicle manufacturers require to redefine the driving experience and meet the evolving demands of tomorrow’s intelligent vehicles."

Rishi Dhall, Vice-President of Automotive, NVIDIA, said, "Valeo’s expertise in high-performance computing, vehicle integration and automotive-scale industrialisation will help automakers adopt NVIDIA Hyperion and NVIDIA Halos at production scale. Together, NVIDIA and Valeo are providing the AI performance, functional safety and scalability needed to accelerate the development of Level 4 autonomous vehicles and robotaxis."

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HCLTech has introduced an artificial intelligence (AI) verification and validation platform utilising NVIDIA simulation tools, agentic systems and open models.

The offering targets vehicle manufacturers and tier-1 suppliers to automate software validation workflows and accelerate release cycles. Built on a simulation-first operating model, the platform connects requirements, test creation, execution, analysis and compliance reporting.

The system integrates HCLTech's engineering expertise and validation model with NVIDIA Omniverse, Cosmos, Alpamayo, NuRec and Isaac Sim technologies to generate scenarios in virtual environments, reducing reliance on physical testing.

Additionally, the platform utilises the NVIDIA Agent Toolkit to orchestrate AI agents powered by Nemotron open models across the validation lifecycle.

Pankaj Tagra, Chief Growth Officer and Global Head of Mobility, HCLTech, said, “Automotive software is evolving faster than traditional validation processes were designed to handle. Frequent software updates, increasingly complex vehicle systems and the need to demonstrate compliance across changing configurations can make validation slow, fragmented and difficult to scale. Powered by NVIDIA, HCLTech’s V&V for Auto is designed to help organisations shift from periodic, labor-intensive testing to continuous, intelligent validation, using simulation and AI to make software release decisions with greater speed and confidence.”

Dr. Sebastian Scheurle, EMEA Industry Lead of Automotive Enterprise, NVIDIA, said, “Validation now sets the pace for software-defined vehicles. With NVIDIA Omniverse, Cosmos and Nemotron at its core, this solution leverages world-class simulation and AI capabilities to support automakers in their journey towards moving more testing into simulation, covering rare and safety-critical scenarios earlier and releasing software with greater confidence.”

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HARMAN has received recognition from the AutoTech Breakthrough Awards, marking the fourth consecutive year the company has been honoured by the market intelligence organisation. The Ready Aware platform received the Driver Safety Solution designation for 2026.

Ready Aware operates as a software-defined vehicle-to-network solution that integrates infrastructure feeds, vehicle telemetry, cloud analytics and digital twin data to provide contextual in-vehicle warnings.

The system processes information regarding road conditions, weather, traffic hazards and signal timing to deliver alerts beyond the driver's line of sight. The architecture works with existing 4G and 5G cellular hardware and vehicle cloud environments, enabling automakers to deploy software updates without hardware modifications. The platform supports Euro NCAP compliance requirements and offers over 15 safety use cases, including intersection warnings, red-light notifications and hazard alerts.

Bryan Vaughn, Managing Director, AutoTech Breakthrough, said, “HARMAN Ready Aware is redefining vehicle safety from reactive intervention to proactive awareness. Almost a quarter of U.S. traffic deaths and roughly half of injuries are related to intersections. Cameras and sensors can be limited by physical occlusions and, on their own, may not have access to information about upcoming signal changes or other traffic conditions. Ready Aware’s software-defined model connects the intelligence already present in cities and connected vehicles, then delivers it to the driver as a timely, contextual alert. Ready Aware turns infrastructure data, vehicle telemetry and cloud analytics into actionable driver awareness—available today, scalable tomorrow, and quickly deployable.”

The system uses a cloud analytics and scoring layer named the Confidence Engine to filter data feeds, reduce false alerts and prioritise notifications to minimise distraction. Automakers can integrate the software via client-to-cloud or cloud-to-cloud configurations to support subscription services and feature monetisation.

Suman Sehra, Global Head of Connectivity Product and Portfolio Management, HARMAN, said, “Ready Aware gives automakers a flexible way to move connected vehicle safety from reactive intervention to proactive awareness. By transforming real-time road intelligence into timely, contextual alerts, Ready Aware helps drivers anticipate hazards before they come into view while giving automakers a scalable foundation to continuously enhance safety through software. This recognition reflects HARMAN’s vision for safer, more informed mobility.”

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