Intel CEO believes over 20 percent of premium vehicles' bill of materials will be dedicated...


Posts: 325   +2
In brief: With the modernization of vehicles, the number of chips needed to manufacture them increased proportionally. By 2019, semiconductors only accounted for four percent of a premium vehicle's bill of materials (BOM), but this value is expected to grow in the coming years. By 2025, 12 percent of the BOM should be used on chips, growing to 20 percent by 2030.

The predictions presented at IAA Mobility by Pat Gelsinger, Intel's CEO, represent 5x growth over 11 years. Besides the increase of semiconductors to manufacture premium vehicles, Gelsinger also expects to see the total addressable market (TAM) hike to $115 billion by the end of this decade, representing over 11 percent of the entire silicon TAM by then.

According to Gelsinger, the reason for this is "the digitization of everything" alongside the other "four superpowers:" ubiquitous computing, pervasive connectivity, cloud-to-edge infrastructure, and AI. These four are paving their way into the automotive industry, as manufacturers offer driverless systems, driving assists, navigation systems, improved security features, and so on.

The increased need for semiconductors is prompting Intel to invest in new fabs and upgrade existing ones. In the US, we already know about Intel's plans of a $120 billion mega-fab and the $3.5 billion investment in the New Mexico fab. Across the pond, the company plans to build two fabs with a joint investment of €80 billion.

Intel is also discussing with its European partners the best way for them to use improved node processes. Vehicle chips are predominantly based on older nodes, but Intel expects to change this in the coming years. To do so, the company is committing capacity in its Ireland fab to the automotive industry, as well as launching the Intel Foundry Services Accelerator, a program designed to help automotive chip designers transition to advanced nodes.

"This new era of sustained demand for semiconductors needs bold, big thinking," said Gelsinger. "As CEO of Intel, I have the great privilege to be in a position to marshal the energies of 116,000 employees and a massive chip-design and manufacturing ecosystem, to meet the demand."

Gelsinger's expectations come amid what might be the worst time of the ongoing chip shortage, as chip lead times recently reached record highs of 26.5 weeks and foundries increased chip prices significantly. Even car manufacturers like Toyota had to cut production by 40 percent because of the ongoing situation.

We sincerely hope Gelsinger's expectations can be met and improve the dire condition in which the semiconductor industry is currently in.

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Posts: 8,432   +7,877
This is what he wants, but he certainly does not have a crystal ball that is capable of accurately predicting the future. All he cares about is the bonuses he will get if his prediction comes true.


Posts: 547   +304
So, they used to use cheap a** chips for on board computers, now they need to use PS5 level chips because Tesla did it with their new premium line up Plaid, I guess that's how he came up with the conclusion.


Posts: 3,960   +7,016
Wouldnt it be easier to use fewer, more powerful chips and simplify the design? Unless you look at self driving, it doesnt take significantly more power to run a car todya then it did 5 years ago, and thus the BoM should be going down, not up.

Maybe if they'd stop putting so many friggin screens in cars today.


Posts: 1,297   +970
116k employee engine and all we got as consumer is a decade of stagnation when Intel didn't have AMD competing.


Posts: 1,352   +2,033

This maybe makes sense for the initial generations of true fully autonomous driving, which is a high value feature and understandably expensive until commoditized.

For anything else, I'd wonder what those chips were doing and if they were adding any actual value to the driver. I care about infotainment of course, but I want that to come from my own phone. I generally feel like the digitalization is helping everyone else except the actual owner/driver (it's for gathering data, or marketing, or locking you into the dealerships because only they have the access terminal to fix anything, etc etc etc). Older car components with no digital components seemed to do their job just fine, and were easier to repair or replace.