Automakers to design own chips by 2025: Gartner

  • Market: Metals
  • 07/12/21

Semiconductor shortages and supply chain bottlenecks, coupled with an increasing push for electrification and autonomous driving capabilities, will drive half of the top 10 automotive original equipment manufacturers (OEM) to design their own chips by 2025, research firm Gartner predicts.

Semiconductor shortages throughout this year has curtailed vehicle production at many large manufacturers, including Volkswagen, Volvo and Renault.

Furthermore, the shift from internal combustion engine (Ice) vehicles to electric vehicles (EVs) requires more developed semiconductors that have advanced features. As chip makers are typically further removed from automakers' supply chain, they are slower to respond and adapt to any changes in demand.

"In most cases, chip makers are traditionally tier three or tier four suppliers to automakers, which means it usually takes a while until they adapt to the changes affecting automotive market demand. This lack of visibility in the supply chain has increased automotive OEMs' desire to have greater control over their semiconductor supply," research vice-president Gaurav Gupta said.

The ongoing shortage is for semiconductor technology node devices that are fabricated on smaller eight-inch wafers, for which capacity expansion remains difficult, Gartner said. As a result, shortages are likely to persist into next year.

Several automakers and semiconductor foundry companies have already announced plans to expand chip fabrication capacity.

Foundries such as TSMC and Samsung — who are jointly building a new chip fabrication plant in Japan in 2022 — have provided access to manufacturing processes, while other unnamed producers have given access to advanced intellectual property that make custom chip design accessible, Gartner said.

EV manufacturer Tesla has been designing its own chips since 2016 — having previously sourced them from US-based NVIDIA — and manufacturing them through a partnership with Samsung.

Last month, Ford Motor and US semiconductor manufacturer GlobalFoundries signed an agreement to boost chip supplies for Ford and the wider automotive industry.

Gartner also predicts that by 2025 the average sale price of new vehicles in the US and Germany will be over $50,000, which could flatten or even drag on the new vehicle market.


Sharelinkedin-sharetwitter-sharefacebook-shareemail-share

Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

News
15/04/24

Poland's JSW declares force majeure on coking coal

Poland's JSW declares force majeure on coking coal

Warsaw, 15 April (Argus) — Polish coking coal and met coke producer Jastrzebska Spolka Weglowa (JSW) declared force majeure on some of its coking coal contracts and cut its output outlook following a fire at its Budryk mine on 5 April. JSW expects production at Budryk mine — which produces premium hard coking coal, semi-soft coking coal, as well as thermal coal grades — to fall by 400,000t than previously planned as a result of the blaze. The fire affected a long wall located at a depth of 1,290m that was planned for closure, but it forced the evacuation of mines from affected areas, the company said. A fire that broke out at the firm's premium hard coking coal-focused Pniowek mine in December last year will also result in greater production loss than previously expected, JSW said. Output at Pniowek will be down by 450,000t from the 350,000t reduction estimated in December. JSW operates four mines in southern Poland. In the first quarter of this year, JSW produced 2.4mn t of coking coal, representing a decline of about 10pc both on the year and on the quarter. JSW's production of coke reached 830,000t in the first quarter of this year, up by 8pc on the year but down by 5pc from the fourth quarter of last year. Metallurgical coke typically accounts for about three-quarters of JSW's total coke output. Its met coke sales significantly exceeded output, reaching 990,000t in the first quarter of this year. JSW last year produced 10.9mn t of coking coal, down by 1pc on the year, and 3.35mn t of coke, up by 4pc on the year. By Tomasz Stepien Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Read more
News

Japan’s Nippon Steel halts output at Kimitsu plant


15/04/24
News
15/04/24

Japan’s Nippon Steel halts output at Kimitsu plant

Tokyo, 15 April (Argus) — Japan's largest steel mill Nippon Steel has partially suspended production today at its Kimitsu plant in eastern Chiba prefecture because of operational issues. Nippon Steel suspended production at some of its blast furnaces in the plant on the back of operational issues, said the company, without disclosing further details. The suspension is temporary, a company representative told Argus , although it remains unclear when the plant will resume production. Operational issues can come in a variety of forms, the representative added, including the quality of the raw materials. The firm has not disclosed output volumes at the Kimitsu plant. Nippon Steel's overall crude steel output for the April 2023-March 2024 fiscal year is estimated at 35mn t , according to the firm, up by 2.2pc from a year earlier. By Yusuke Maekawa Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

G7 leaders to meet over Iran's attack on Israel


14/04/24
News
14/04/24

G7 leaders to meet over Iran's attack on Israel

Dubai, 14 April (Argus) — Leaders of the G7 will meet today, 14 April, to co-ordinate a diplomatic response to Iran's overnight air attack on Israel, which ushered a new phase in a six-month conflict that is threatening regional escalation. G7 presidency Italy "has organized a conference at leaders' level for the afternoon of today," Italian prime minister Giorgia Meloni said on X, formerly Twitter. US President Joe Biden has pledged a co-ordinated G7 diplomatic response and condemned the Iranian assault. Iran fired hundreds of drones and missiles against Israel on the evening of 13 April, according to the country's state-owned news agency Irna. Almost all were intercepted before they reached Israeli airspace and there were no fatalities reported by Israel. One civilian was injured and an air force base in southern Israel was lightly damaged, according to the Israel Defence Forces (IDF). The Iranian attack came in response to a suspected Israeli air strike on the vicinity of Iran's embassy compound in Damascus, Syria, on 1 April. Tehran's foreign minster Hossein Amir-Abdollahian said Iran considers this to be the end of its operation. But energy markets, which have been supported in recent weeks by a geopolitical risk premium, will face a week of uncertainty about whether Israel will retaliate. The front-month June Ice Brent contract was trading at $90.45/bl before markets closed for the weekend, and hit a more-than five month high of $92.18/bl on Friday, 12 April. Israeli officials said the attack was "a severe and dangerous escalation" from Tehran. Israel's war cabinet is meeting today to discuss a response. "We will build a regional coalition and exact the price from Iran in the fashion and timing that is right for us," said cabinet minister Benny Gantz. The US is urging Israel to claim victory for its defence, in an apparent effort to discourage Israeli prime minister Benjamin Netanyahu's government from feeling compelled to retaliate. While noting that Israel ultimately will make the decision as to how to respond, White House national security communications co-ordinator John Kirby, in a televised interview today, hailed what he called Israel's "incredible military achievement" in defending itself against the attack. Very little managed to penetrate the defensive shield, "and the damage was extraordinarily light," he said. The US military played a role in helping to defend against the attack, bringing down "several dozens of drones and missiles," Kirby said. UK prime minister Rishi Sunak said the Royal Air Force shot down "a number of Iranian attack drones". Israel's western allies are urging it to show restraint as they try to prevent a wider conflict in the Middle East, which could directly affect oil producers and send energy prices soaring. President Biden is especially keen to avoid such a scenario in an election year. By Bachar Halabi and David Ivanovich Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Gunvor set for buying spree after windfall: CEO


12/04/24
News
12/04/24

Gunvor set for buying spree after windfall: CEO

London, 12 April (Argus) — Trading firm Gunvor plans to use part of a massive earnings windfall over the past two years to build out its asset base, its chief executive Torbjörn Törnqvist told Argus . "Today, we are under-invested in assets so we will change that," Törnqvist said, adding that investments would be broad based and to some extent opportunistic. "We will employ quite a lot of capital in investments." Independent commodity trading companies are sitting on unprecedented piles of cash after two years of bumper earnings arising from supply chain disruptions and market volatility. While Geneva-based Gunvor is smaller than its peers Vitol, Trafigura and Mercuria, it is still a huge company by most metrics. It reported revenues of $127bn in 2023 and a profit of $1.25bn, following a record $2.36bn in 2022. It has kept most of its earnings in house and had an equity position of almost $6.16bn by the end of 2023 — its highest ever. Törnqvist is eyeing further growth. "We will definitely be a much bigger company, that I can say," he replied when asked where he saw Gunvor in 10 years' time. "I think we will grow in tune with the [energy] transition." Trading firms are looking for ways to keep their competitive advantage, particularly given the uncertainties associated with the energy transition. One emerging trend is an appetite for infrastructure. Vitol is in the process of buying a controlling stake in Italian refiner Saras, which operates the 300,000 b/d Sarroch refinery in Sardinia. Trafigura said this week that it is in talks to buy ExxonMobil's 133,000 b/d Fos refinery on the French Mediterranean coast. Part of the rationale behind these moves is to increase optionality and take advantage of the loss of Russian products to the European market, as well the closure of large chunks of local refining capacity. Gunvor owns the landlocked 100,000 b/d Ingolstadt refinery in Germany and a 75,000 b/d refinery in Rotterdam, where it plans to shift away from fossil fuel use. "Many oil refineries have been up for sale and still are," Törnqvist said. Asked if Gunvor was looking for something similar, he said the company is interested in the "right opportunity" whether in upstream, downstream, midstream or shipping. "It all feeds into what we are doing and all supports our underlying trading," he said. But Törnqvist suspects a lot of Gunvor's growth will come from gas and power — areas where trading companies are already seeing rising profits. The company made its first investment in a power generation asset late in 2023, when it agreed to buy BP's 75pc stake in the 785MW Bahia de Bizkaia combined-cycle gas turbine plant in Bilbao, Spain. It has signed a slew of LNG offtake agreements in the past year and continues to grow its LNG tanker fleet . "We're building logistical capabilities in LNG," Törnqvist said. "Oil is here to stay" Törnqvist said Gunvor is well placed to navigate the energy transition, and is stepping up investments in renewables and biofuels and expanding into carbon and metals trading. "There will be disruptions, there will be different paths to the transition in different parts of the world which go at different paces and have different priorities and ways to deal with it," he said. "This will create opportunities." But Törnqvist is clear that oil and gas will remain an integral part of Gunvor's business. "We feel that oil is here to stay," he said. "And it will grow for several years." By Aydin Calik Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Japan’s Daihatsu to reopen Kyushu, Osaka car plants


12/04/24
News
12/04/24

Japan’s Daihatsu to reopen Kyushu, Osaka car plants

Tokyo, 12 April (Argus) — Japanese car manufacturer Daihatsu will resume operations at its Kyushu and Osaka plants from 6 and 7 May respectively, which will mark a full reopening of its domestic facilities. Production volumes at these plants were undisclosed. Daihatsu suspended all of its operations in December 2023 after it was accused of tampering with safety test results. It resumed partially in February but most of its production facilities, including its major plant in Osaka, remained closed. Daihatsu produced nothing in January and 6,692 units in February, less than one-tenth of its production a year earlier. This led to year-on-year declines in Japan's total car output in January and February . By Yusuke Maekawa Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more