According to the news from Mydrivers.com, BYD has reached a groundbreaking milestone, producing its 5 millionth new energy vehicle. The company asserts that China now possesses critical new energy vehicle technology and a robust industry chain.

BYD contends that a globally recognized brand stands as a vital hallmark of an automotive powerhouse. Throughout the annals of automotive industrial history, every automotive giant has harbored a world-renowned brand. For instance, the United States boasts General Motors, Ford, and Tesla; Germany takes pride in Volkswagen, Mercedes-Benz, and BMW; Japan and South Korea have cultivated their own globally esteemed brands. Presently, China lacks a universally acknowledged world-class automotive brand.

Yet, recent reports from Mydrivers.com highlight that China has already ascended to the status of a new energy vehicle juggernaut, wielding pivotal core technology and a comprehensive industrial framework, thereby freeing the automotive industry from constraints. Objectively, China possesses the foundation and capability to forge a world-class brand. Subjectively, the emotional desire to establish such a global automotive brand exists.

BYD also anticipates that by 2025, the penetration rate of new energy vehicles in the Chinese market will surpass 60%. In 2022, Chinese brands forayed into over 50% of the market for the first time, with projections indicating that within 3 years, their market share will escalate to 70%. In a recent development, data from the China Association of Automobile Manufacturers (CAAM) indicates that in the first half of this year, China’s complete vehicle exports surged by 76.9% YoY, surpassing Japan and claiming the global lead for the first time.

(Source: https://news.mydrivers.com/1/928/928676.htm)

Last week, major power semiconductor manufacturer Infineon announced plans to invest up to 5 billion euros over the next five years to construct the world’s largest 8-inch SiC power wafer factory in Kulim, Malaysia. This expansion will raise the total investment in the Kulim plant from 2 billion euros to 7 billion euros.

Interestingly, in February of this year, Wolfspeed announced its own plans to build what is touted as the world’s largest 8-inch SiC factory in the Saarland region of Germany. Infineon’s significant investment in the Malaysian 8-inch SiC factory sets the stage for potential competition with Wolfspeed, sparking an impending battle for Silicon Carbide production capacity.

In fact, driven by the rapid growth of industries like electric vehicles, the space for SiC power devices is expanding, attracting both Chinese companies and international enterprises to ramp up production.

According to statistics from TrendForce, aside from Wolfspeed, the first half of this year saw numerous companies, including STMicroelectronics, Mitsubishi Electric, Rohm, Soitec, and ON Semiconductor, expanding their production capacities. STMicroelectronics, for instance, announced a $4 billion investment in January to expand 12-inch wafer production. In June, they partnered with San’an Optoelectronics to establish a joint venture for 8-inch SiC device manufacturing, with an estimated total investment of around $3.2 billion.

On the Chinese front, there have been seven expansion projects related to Silicon Carbide. CRRC is investing 11.12 billion yuan to establish a project for the industrialization of medium and low-voltage power devices. YASC is also planning to construct a Compound Semiconductor power device production project, encompassing epitaxial growth, wafer manufacturing, packaging, and testing lines. Upon completion, the facility will have an annual production capacity of 360,000 6-inch SiC wafers and 61 million power device modules.

Additionally, BYD plans to invest 200 million yuan to establish a SiC epitaxial trial production and mass production project at its automotive production base in Shenzhen. The expansion will add 6,000 SiC epitaxial wafers per year, bringing the total capacity to 18,000 wafers per year.

(Photo credit: Tesla)

South Korean media reported that Samsung is set to manufacture a new generation of Full Self-Driving (FSD) chips for Tesla’s Level 5 autonomous vehicles. These chips will be utilized in Tesla Hardware 5 (HW 5.0) onboard computers, with production expected to commence after 2025. The chips will be manufactured using Samsung’s 4nm process.

TrendForce’s analysis:

Samsung May Competing with TSMC for Tesla HW 5.0 Chips

In the early stages of Tesla’s autonomous driving technology, the company collaborated with Samsung for FSD chips used in various vehicle models, including Model 3, Model 5, Model X, and Model Y. However, in 2022, Tesla chose to work with TSMC, citing TSMC’s better yield performance in 4nm process technology at that time.

In response, Samsung has been actively improving its 3nm and 4nm process technologies within a short period. While Samsung’s 4nm process yield has reached 75%, it still slightly lags behind TSMC’s 80%. Despite this difference, given their previous collaborations, it is not ruled out that Tesla might place orders with both TSMC and Samsung this time. The main reason being Samsung’s plan to advance to the 2nm-level SF2 process technology in 2025 and further progress to the 1.4nm-level SF1.4 process technology in 2027, aligning its overall roadmap with TSMC’s. This advancement will assist Tesla in accelerating the production plan of its DOJO supercomputer, facilitating the transition to Level 5 autonomous driving.

(Photo credit: Tesla)

China’s Automotive Price War Rages On: Some automakers have been gradually reclaiming outsourced orders for the battery, motor, electronic control system since May and June, shifting towards in-house production. Recently, they have asked suppliers to requote for second-half orders, with Samsung, Murata, Taiyo Yuden, PSA and Yageo actively vying for contracts.

Due to the more stringent certifications in the automakers’ supply chain compared to tier 1 suppliers, the majority of battery, motor, electronic control system MLCC suppliers still come from Taiwan, Japan, and Korea. Among them, Korean manufacturer Samsung has made significant progress in the Chinese automotive market this year. They have been actively providing sample for certifications and competitive pricing, securing a large share of orders and displacing Japanese manufacturers Murata and TDK, who had long held the lead.

Ongoing negotiations between automakers are expected to conclude with finalized orders by the end of August. According to the channel check from TrendForce, it appears that Samsung will maintain its leading position with a low-price strategy, while Murata, unwilling to be drawn into a price war reminiscent of consumer electronics, will remain conservative with pricing to secure a substantial market share. Taiyo Yuden, PSA and Yageo, though limited in automotive product offerings, have been proactive in their bidding efforts and have secured several orders.

(Photo credit: Yageo)

As the pandemic has eased, the global automotive market is picking up momentum, and it is estimated that the global shipments of automotive panels will exceed 200 million units in 2023. With the continuous demand for size enlargement and specification improvement in automotive panels, the adoption of TDDI architecture is becoming more prevalent, and it is expected that TDDI will gradually become the mainstream for automotive panels.

On the other hand, AMOLED panels have started to have opportunities for adoption in emerging electric vehicles and some high-end car models. However, their adoption has been slow due to potential issues with reliability, lifespan, and brightness. Currently, the overall penetration rate for AMOLED panels in the automotive sector is estimated to reach 6% by 2026.

Can Panel Manufacturers Replace Traditional Tier 1 Players and Directly Serve Automakers?

As traditional internal combustion engine vehicles transition to electric vehicles and the level of in-car electronics continues to rise, coupled with the development of autonomous driving technologies, the demand for automotive displays is constantly expanding. The integration of digital display panels with touch functionality is gradually becoming mainstream, and panel sizes are increasing, moving towards more integrated designs. Specifications such as resolution, wide viewing angles, and high refresh rates, as well as unique designs, are becoming focal points. Currently, display panel specifications are moving towards LTPS LCD panels, which offer larger sizes, superior display performance, and better energy efficiency.

Looking at the market conditions, after the outbreak of the pandemic in 2020, the demand for automotive panels declined, but it gradually recovered in 2021 and 2022. However, there is still an oversupply situation, and it is estimated that there will be a slight growth of 5.1% to reach 205 million units in 2023. In terms of shipment scale, China’s panel shipments maintain the best position with a share of over 40%, while Japanese panel manufacturers have been squeezed by Chinese counterparts, reducing their share to about 20%. Taiwan’s panel manufacturers account for approximately 21%, and Korean panel manufacturers represent 8%.

The traditional shipment model involves Tier 1 players contracting with car manufacturers for related validation, assembly, and supply chain management roles, and then subcontracting Tier 2 panel suppliers. With the transformation of the automotive industry and the semiconductor component shortages in the past few years, as well as the increased requirements for interior design in vehicles, car manufacturers are starting to seek better control over the supply chain. As a result, panel manufacturers may replace Tier 1 players and directly supply to automakers, and Tier 1 suppliers will face competition from panel manufacturers.

The Automotive TDDI Architecture Has Cost Advantages

In the early days, LCD automotive panels mainly used external touch solutions, with car-use DDI and independent touch ICs on the IC architecture. However, as panel sizes increased, the number of ICs used also increased, leading to higher costs. Therefore, the TDDI architecture became a new development direction.

TDDI is commonly used for panels up to 30 inches in size. A single TDDI solution can be used for 20-inch panels, while for 20-30 inch panels, a TDDI-cascade solution with approximately 2-3 TDDI-cascade architectures is often used. Panels larger than 30 inches use the LTDI (Local TDDI) structure.

New Display Technology Awaits Automotive Certification; Significant Growth Expected after 2025

AMOLED is mostly used in high-end car models or stylish new electric vehicles, but its rapid development is hindered by limitations in brightness, panel lifespan, and reliability. In comparison, LCDs with MiniLED BLU architecture offer similar display performance to AMOLED but at a more affordable price and with better safety, and they are expected to compete with AMOLED in the market.

For more information on this report or market data from TrendForce’s Department of Display Research, please click here, or email Ms. Grace Li from the Sales Department at graceli@trendforce.com