According to industry sources on Aug. 28, the automotive semiconductor market, which has been a market centered on low-end products in a multi-product, low-volume production system, is rapidly emerging as a source of demand for high-performance semiconductors in the trend of strengthening autonomous driving and infotainment functions. This is fueling competition between Samsung Electronics and TSMC.
In the past, the price of automotive semiconductor chips was one tenth of that of mobile application processors (APs), making them a low-cost product with smaller margins than mobile APs. However, this has changed as demand for high-performance automotive semiconductors is expected to explode as electric and autonomous vehicles become more widespread.
The market for automotive semiconductors, which has been dominated by legacy processes, is also undergoing a miniaturization trend which may help Samsung Electronics get more foundry customers. Samsung is said to be the favorite to win Tesla’s order for its fifth-generation autonomous driving chip (HW 5.0), which will use cutting-edge 4-nanometer processes. Samsung Electronics is already supplying Tesla with 14-nm fully self-driving (FSD) semiconductors. The Korean semiconductor giant aims to enter a 2-nm process for automotive chips by 2027.
The growing demand for automotive chips is also expected to be favorable for memory semiconductors, where Samsung is strong. Last month, Samsung announced the start of mass production of its next-generation 256 GB Universal Flash Storage (UFS) 3.1 NAND Flash memory for in-vehicle infotainment, and unveiled its ambition to overtake current industry leader Micron as No. 1 in the automotive memory market by 2025.
TSMC is accelerating the construction of factories in Japan and Germany for the automotive semiconductor market. According to foreign media outlets, TSMC has finalized a plan to build a 10 billion euro (US$14.45 billion) semiconductor plant in Dresden, Germany.
“The new plant will zero in on products such as automotive microcontrollers (MCUs) for automobiles, which are automotive semiconductors based on a legacy 28-nm process,” TSMC said. The factory under construction in Kumamoto Prefecture, Japan, is also reportedly focused on automotive semiconductors and image sensors.