Industry discussions to ease chip woes

China's top industry regulator is working to improve communication between local automobile makers and semiconductor companies, to help solve a shortage of chips needed to produce vehicles.

The move came as chips are becoming an essential part of the vehicle industry, which is increasingly embracing electricity, connectivity and intelligence.

Qiao Yueshan, head of the electronic information department at the Ministry of Industry and Information Technology, said semiconductors are the cornerstone of the information society, and a driving force behind the automobile sector.

To promote the communication between local automakers and semiconductor companies, the ministry has guided relevant parties to compile a brochure to better match the supply and demand, Qiao said.

The brochure is compiled by China Automotive Chip Industry Innovation Strategic Alliance, an organization founded in September 2020 to promote the development of the nation's homegrown auto semiconductor sector.

The alliance said it also plans to set up an online platform for carmakers and chipmakers to better match their supply and demand.

According to Qiao, in recent years, domestic companies have produced a string of high-quality semiconductor products for the auto industry, thanks to the support of local carmakers.

"But generally speaking, the domestic semiconductor sector does not have enough understanding of car companies' demands, and neither do they have enough experience in bringing their products to the market," Qiao said.

The insufficient supply of auto chips became more evident amid the COVID-19 pandemic. Chip shortages emerged in China in late December as a result of the unexpected recovery in the auto market. The revived demand for chips used in consumer electronics such as personal computers and smartphones is also affecting the production of chips used in cars.

Dong Yang, co-chairman of China Automotive Chip Industry Innovation Strategic Alliance, said currently, China relies on imports for crucial auto chips. Though China accounts for more than 30 percent of global sales of cars, the nation produces only about 5 percent of the global auto chips.

"It is important to cultivate competitive Chinese auto chipmakers. But it does not mean that we would sever our ties with the global auto chip supply chain. Instead, we are just striving for a healthier proportion so that we can rely on ourselves when emergency occurs," Dong said.

Earlier this month, Chinese automobile maker SAIC Motor Corp Ltd said it has joined hands with smart chip company Horizon Robotics to further expand in the automobile chip arena.

Yang Xiaodong, vice-president of SAIC Motor and general manager of SAIC Passenger Vehicle, said chips are one of the key areas for smartening the automotive industry, and Horizon Robotics is one of the few companies having capabilities to manufacture smart chips, vision perception algorithms as well as data technology.

Huang Jipo, chairman of Chinese chipmaker Sine Microelectronics, said earlier that carmakers have stringent standards to ensure the reliability and stability of automobile chips, which makes them prefer established foreign chip giants over emerging Chinese companies.

"But as Chinese companies beef up research and development capabilities, they now have the potential to enter the mainstream supply chain of automakers," Huang said.