Semiconductors play a pivotal role in developing high-speed and efficient chargers, making the EV adoption more convenient
As the world races toward an electric vehicle (EV) future, semiconductors are the behind-the-scenes main players powering this paradigm shift. Semiconductor chips are at the heart of various critical systems in EVs, influencing battery management, adaptive cruise control, enhancing efficiency and safety.
For EV charging, semiconductors play a pivotal role in developing high-speed and efficient chargers, making the adoption of EVs more convenient for consumers. Additionally, in battery management, these chips are instrumental in managing lithium-ion batteries, extending their lifespan, improving energy efficiency, and reducing waste – crucial factors for sustainable mobility. However, EVs require up to three times more semiconductor content than conventional vehicles.
Given their huge role in the digitisation drive of the country, as per PwC, the semiconductor market in India is expected to reach $32 billion by 2025. The EV market accounts for a significant share of this growth. The Economic Survey of India 2023 forecasts a 49% compound annual growth rate (CAGR) in India’s domestic EV market between 2022 to 2030, with an estimated 10 million annual sales by 2030. On the demand side, therefore, semiconductor technology is on the upswing.
We have seen the focus on experience design, safety, performance, sustainability, and optimization, disrupting the mobility landscape. The era of Software-Defined Vehicles (SDV) has ushered in safer, more comfortable, and more convenient driving experiences, and all this has been possible with semiconductor technology.
Fig 1: Semiconductors play a critical role in EVs. Image source: Getty images
Semiconductors are indispensable for ensuring the efficiency and reliability of systems such as Advanced Driver Assistance Systems (ADAS), infotainment, sensors, powertrains, and EV battery management. Looking ahead, vehicle design and the concept of Vehicle-as-a-Service are poised to transform in-cabin experiences, charging systems, space utilisation, traffic circulation, surveillance, and maintenance support systems. This transformative shift promises a smarter mobility ecosystem with reduced emission burdens, which is vital to controlling climate setbacks. The auto semiconductor market is projected to grow from $42.9 billion in 2022 to $70 billion by 2027 as per Markets and Markets.
However, the semiconductor industry has faced substantial challenges in recent years due to disruptions in the global supply chain. In 2020, global semiconductor sales reached $440 billion, a 6.6% increase, even as global GDP contracted by 3.5%. The industry’s growth, despite the economic slump, emphasises its importance in powering trillions of dollars worth of goods and processes.
India currently relies on Taiwan, Singapore, Hong Kong and Vietnam for its chip imports. The semiconductor sector’s wide geographic dependence, coupled with geopolitical tensions, has exposed the vulnerabilities of relying on limited external sources for production. Recognizing the need to reduce its dependence on imports, the Ministry of Electronics and Information Technology (MeitY) has unveiled a $10 billion commitment towards the India Semiconductor Mission (ISM).
Geopolitical tensions between major players, such as the US, China, India, and Russia, have made it imperative for like-minded countries to form partnerships to ensure the smooth functioning of the semiconductor supply chain.
Increasing semiconductor content in consumer electronics, automobiles (including EVs), and the rising demand for smartphones is a given in modern, digital times. The rollout of 5G and the increasing adoption of IoT devices are expected to further accelerate the adoption of smart devices, contributing to the semiconductor industry’s expansion in India.
Anil Kempanna is the Chief Executive Officer of Cientra
