The potential of AI in advancing smart manufacturing has been widely recognized, but deaths and injuries involving robots at factories have called attention to functional safety, of which semiconductor chips play a crucial part, according to industry sources.
Major integrated device manufacturers (IDM) are pessimistic about automotive chip prospects in 2025, with Taiwan-based power semiconductor firms taking cautious stances on the European and US markets. However, Taiwanese firms are still hoping to cut into niche markets to weather challenging market conditions.
The automotive industry is experiencing a significant transformation with the rise of electrification and connectivity. Despite this shift, the ecosystem is still in the process of maturing. The automotive semiconductor industry continues to be largely controlled by well-established suppliers from Europe, the US, Japan, and South Korea, even as companies like Tesla and emerging Chinese players make their mark.
International integrated device manufacturers (IDMs) have begun offering automotive-grade chips specifically designed for the China market in 2024, responding to mounting cost pressures in the Chinese automotive sector, according to industry sources.
Tesla's Model 3 has hit a roadblock in Germany's prestigious TÜV safety rankings, while Honda's Jazz demonstrates exceptional reliability in the latest assessment. The 2025 TÜV report, analyzing over 10.2 million vehicle inspections across 228 models between mid-2023 and mid-2024, reveals significant challenges for the American EV maker.
During a recent investor conference in New York, Qualcomm CEO Cristiano Amon emphasized that since 2021, the company has been actively expanding beyond mobile phones. The company's aggressive execution over the past few years has yielded significant results, a strategy that will continue moving forward.
Onsemi's leadership has been increasing its presence in China recently. After Felicity Carson, SVP of global operations at Onsemi, attended PCIM Asia 2024 in Shenzhen at the end of August 2024, company president and CEO Hassane El-Khoury made a subsequent visit to Shanghai to meet with local media.
Mitsubishi Electric is ramping up its power semiconductor production in Japan to meet the surging demand fueled by the EV revolution and global climate change initiatives.
Global IDM leader Onsemi announced a cautious outlook for the semiconductor market in its third-quarter 2024 financial report. CEO Hassane El-Khoury tempered expectations for 2025 but underscored promising growth in China's new energy vehicle (NEV) and industrial energy storage markets, which remain resilient amid broader industry challenges.
Potens Semiconductor, known for its power semiconductors, is actively entering the automotive sector despite the current inventory adjustments in the industry.
STMicroelectronics (STM) has revised its growth targets amid persistent weak demand for chips used in automotive and industrial applications. During its Capital Markets Day in Paris, the chipmaker postponed its goal of surpassing US$20 billion in annual revenue from 2027 to 2030.
STMicroelectronics unveiled a strategic partnership with China's Hua Hong Semiconductor, with a plan to commence production of 40nm process MCUs in Shenzhen by the end of 2025. STMicroelectronics noted the importance of establishing a local manufacturing footprint in China to retain a competitive edge in the EV market.
Rohm Semiconductor is grappling with a significant slowdown in the electric vehicle (EV) market, leading to reduced semiconductor demand and an unexpected financial loss.
Jiang-song Fu, chairman of IC distributor Professional Computer Technology (PCT), projected 2024 to be the trough for their operations. Despite this, the company expects to remain profitable. He highlighted that the AI trend is set to drive substantial growth for various IoT products, including automotive electronics, over 2025-2026.
Taiwanese IT product manufacturers expect AI server demand to drive their growth in the fourth quarter of 2024, as consumer electronics enters the traditional low season. Looking forward to 2025, the manufacturers expect even stronger orders, with AI servers showing the strongest momentum, followed by AI PCs, while automotive electronics will also be a major growth driver.
Wolfspeed's board has announced the dismissal of CEO Gregg Lowe, effective at the end of November. Lowe, who has led the semiconductor company since 2017, will be replaced by Board Chair Thomas Werner on an interim basis as the company searches for a new CEO.
SK Group's silicon wafer manufacturer SK Siltron has confirmed that it will receive a loan of US$544 million from the US Department of Energy (DOE) to invest in its silicon carbide (SiC) wafer factory at its US subsidiary, SK Siltron CSS, which is expected to commence production in 2025.
Europe's automotive sector is facing sweeping changes, marked by mass layoffs and factory closures, with Germany's top automakers—Volkswagen AG, BMW, and Mercedes-Benz—feeling the greatest impact. As labor unions protest, fearing a jobless wave, the situation reveals a broader labor shortfall in Germany, particularly in the booming semiconductor sector, where former auto workers are snapped up even before formally entering the job market.
Leading integrated device manufacturers (IDMs) have expressed concerns about the automotive semiconductor market outlook for 2025. Despite these challenges, Taiwan-based IC design firms within the automotive supply chain remain committed to exploring growth opportunities.
Pegatron is poised to expand its server operations significantly, with initial results from its automotive and server businesses expected to materialize in 2025. Despite being a relative newcomer in the server market, Pegatron emphasizes that after two years of building fundamentals, it anticipates reaping the fruits of its earlier labor next year. While focusing on the three leading cloud service providers (CSP), the company is also pursuing orders from second and third-tier CSPs and enterprise customers. Additionally, it has secured orders from a major semiconductor company in Taiwan, with the project in its final verification stage and shipments scheduled to begin in the first quarter of 2025.
Power management IC (PMIC) specialist Silergy has seen growth in the third quarter of 2024 compared to last year, which chairman Wei Chen attributes to the end of inventory adjustments at its communications-related customers, and a steady inflow of orders across all of the company's new product segments, particularly in the automotive business.
The global semiconductor shortage that plagued automotive chips from 2020 to 2022 has subsided, as electric vehicle (EV) demand in Europe and the US falls short of projections. While this eases immediate supply concerns, major industry players are reassessing their strategies amid new challenges.
Automotive supply chain players are increasingly branching out into non-automotive sectors, notably semiconductors, with companies like Global PMX and TsangYow at the forefront.
Himax Technologies exceeded third-quarter 2024 expectations, fueled by strong automotive IC revenue from Chinese orders. Despite a revenue decline and lower gross margin, the company remains optimistic about growth in the automotive, AI, WLO, and OLED sectors amid market uncertainties.
