Amidst the ongoing conflict between the US and China over semiconductors, interest in automotive semiconductors is growing. China is making a national effort to improve the technological capability of its entire semiconductor industry, including in-vehicle semiconductors.

Major automobile manufacturers, having learnt the lessons of the semiconductor shortage caused by the Corona disaster, are promoting their in-vehicle semiconductor business in various ways, including in-house development, business alliances and investment in semiconductor industry investment funds. BYD is one example of a company that is actively pursuing in-house development. According to the company’s announcement, BYD is the only vertically integrated device manufacturer (IDM) among Chinese automakers that can produce IGBTs, and its products include power semiconductors, control ICs, sensors and wafers, some of which are used in BYD also supplies some products to Chinese competitors in the industry, such as Changan Automobile and Yutong Bus. Private automakers such as Geely Automobile, Great Wall Motor and Ideal Motor are seeking to develop semiconductors in-house. Summarising the current state of China’s in-vehicle semiconductor industry, this report presents an overall picture of Chinese in-vehicle semiconductor chips, followed by a detailed report on the Chinese government’s support measures and recent developments in the in-vehicle semiconductor business of major Chinese car manufacturers.

In China, smart and automated vehicles have developed rapidly in parallel with the electrification of the automobile. As the car market matures, consumer needs are diversifying and new functions are being integrated into digital cockpits one after another as consumers become more discerning about comfort and convenience. The digital cockpit market continues to expand at a brisk pace due to a combination of an environment conducive to innovation, with many ventures emerging as electrification progresses, and a Chinese consumer base that is receptive to new technologies. In addition, China has applied for the largest number of patents in the world for digital cockpits, and trends related to digital cockpits by Chinese companies are attracting attention worldwide.

The rapid expansion of the EV market in recent years has also been influenced by the evolution of digital cockpits, which offer more convenient functions, and the fact that the current NEV purchase subsidy will end at the end of 2022, which could lead to a decline in consumers’ willingness to purchase EVs, further increasing the importance of the digital The importance of digital cockpits as a key to EV sales is expected to increase further in the future. Chinese OEMs are actively entering overseas markets with EVs as a breakthrough, for example by exhibiting a number of EVs at the Indonesia Motor Show in August 2022 and the Paris Motor Show in October of the same year. The effect of this is increasing the likelihood of full-scale overseas expansion of digital cockpit-related technologies and suppliers. For Japanese OEMs, China’s development in the EV and smart sector poses a threat, but also an opportunity to gain suggestions from the transformation. Opportunities for Sino-Japanese company collaboration are also increasing.