China chips away at semiconductor woes

Progress in that direction has been made already. In March, 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 the company's passenger vehicle branch, said chips are one of the key areas for smartening the automotive industry, and Horizon Robotics is one of the few companies that boasts capabilities in smart chip manufacturing, vision perception algorithms as well as data technology.

Horizon Robotics' partners among mainstream automakers include Changan Auto and Great Wall Motors.

The current chip shortage also has a silver lining: it could lead to the greater development and strengthening of China's domestic chip industry, providing the country with a more secure supply chain in the future.

That will be crucial to the healthy long-term development of China's automotive industry, which is increasingly embracing electric vehicles that are connected and "intelligent".

Thomas Manfred Muller, executive vice-president of Volkswagen Group China, earlier said at a semiconductor forum that in the future, there will be around 6,000-10,000 chips in a car, and 80 percent of the innovations in the automotive industry will be based on semiconductors.

Dong from the China Automotive Chip Industry Innovation Strategic Alliance said China now has capabilities to overcome the problem of insufficient domestic production of auto chips.

"Auto chips do not require the highest-end manufacturing technology. For instance, most car chips are made with 28 to 40 nanometer manufacturing process, which Chinese chipmakers are capable of. There is no high threshold for the design capabilities, production conditions and manufacturing equipment of chips," Dong said.

"The main difficulty lies in the high requirements for reliability, durability for bad weather, consistency and functional safety. China only lacks an ecosystem for the design, production and application of automotive chips. This is where we must excel in."

According to him, China has the world's largest market for both automobile production and sales. The country's production volume accounts for about one-third of the world's, and it may account for half of the world's output in the future. Such a large market can support the development of key semiconductor materials, core components and high-end equipment.

"More importantly, Chinese carmakers are now more willing to partner with domestic auto chipmakers, which will help usher in a golden development stage for the indigenous auto chip sector."