Silicon carbide (SiC) and Gallium nitride (GaN) drive change in automotive semiconductors
In an interview with Third Bridge Forum, the specialist said electrification was driving change in third-generation semiconductor materials. They told us that silicon carbide (SiC) and gallium nitride (GaN) are now “widely adopted” in the automotive industry as an alternative to silicon. Both can withstand higher voltages than silicon and are “well suited” for scaling, according to the specialist.
SiC and GaN “at a component level” are 30-40% more expensive than silicon, the specialist told us. However, both provide cost savings of more than 20% on a system level when compared to silicon. The specialist said they could envisage GaN and silicon co-existing, but thinks that once SiC is scaled up, adoption of it will increase.
Historically, original equipment manufacturers (OEMs) received YoY price reductions from integrated circuit (ICs) houses, but the current chip shortage is reversing that trend. The specialist said the semiconductor industry has realised that semiconductors are going to play a “key role” in the electrification of automobiles, and, as such, prices are likely to increase.
The number of semiconductors used in cars has also grown by 3-4 times, according to the specialist, with “pure semiconductor content” in a car now worth as much as USD 2,000 compared to USD 300-350 a decade ago. The specialist told us the breakdown in semiconductor costs for L2 to L5 vehicles, splitting them into power content, IC content and sensors.
The specialist also explained IC to sensor cost ratios, and how they are expected to become increasingly proportional as IC-sensor fusion develops. Sensors “need companionship” with ICs, according to the specialist, particularly as car architecture is likely to change, with one console controlling “every part” of the vehicle. Finally, the specialist told us that as the content of semiconductors inside cars grows, new semiconductor manufacturers and OEMs are likely to enter the space – something the specialist said the industry needs – as new players bring more “constructiveness”.
To access all the human insights in Third Bridge Forum’s Automotive Chip Procurement – Part 2 – Silicon Content Per Vehicle & OEM Prioritisation Interview, click here to view the full transcript.
The information used in compiling this document has been obtained by Third Bridge from experts participating in Forum Interviews. Third Bridge does not warrant the accuracy of the information and has not independently verified it. It should not be regarded as a trade recommendation or form the basis of any investment decision.
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