According to a report by Nikkei, Chinese semiconductor equipment manufacturer Advanced Micro-Fabrication Equipment Inc. (AMEC) has announced that it has filed a lawsuit against the U.S. Department of Defense (DOD) in a U.S. court over being blacklisted as a Chinese military-industrial company.

Reportedly, in January, AMEC was placed on the U.S. Department of Defense’s list of Chinese military-industrial enterprises operating in the United States.

Thus, the company argues that this action violates procedural due process and has severely harmed its reputation. AMEC asserts that it has never engaged in any military-related activities.

Addressing the matter, neither AMEC nor the U.S. Department of Defense has commented on the matter.

The lawsuit comes days after the Financial Times reported that the U.S. Department of Defense planned to remove Chinese automotive LiDAR manufacturer Hesai Technology from its export control blacklist.

At that time, per Nikkie’s report, Hesai had sued the DOD in May and its CEO, David Li, pointed out that allegations of military ties are ridiculous.

AMEC stated that it was previously listed as a Chinese military-industrial enterprise in January 2021 but was removed from the list in June of the same year after requesting the U.S. Department of Defense to provide sufficient facts and evidence. The CEO reportedly expressed shock at AMEC’s re-inclusion on the blacklist, calling it a mistake and baseless.

AMEC specializes in chip equipment with a focus on etching processes. The company reported first-quarter revenue of CNY 1.6 billion (approximately 223 million USD), a 31% increase compared to the same period in 2023.

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According to Daily Telegraph, Coherent’s fab located in Newton Aycliffe, County Durham, Northern England, is facing potential sale or closure as Apple ceased a supply agreement. Currently, the plant is under review, which might turn out to be sold. Coherent has issued a last-time-buy notice to its customers.

The UK fab primarily manufactured III-V compound semiconductor RF microelectronics and optoelectronic devices for communications, aerospace and defense sectors. The collaboration between the plant and Apple involved Face ID feature in iPhones.

However, Apple had put an end to the related key product supply contract with Coherent in late fiscal 2023. In its latest financial report, Coherent noted a significant decline in sales of VCSEL products for 3D sensing in Apple’s iPhones, which had a remarkable impact on the company’s overall revenue.

It’s worth noting that Coherent’s fab laid off over 100 employees in April 2023, retaining around 250. Later, Coherent indicated in the last-time-buy notice that Apple’s termination of the supply agreement further placed the ongoing viability of the business in doubt. A strategic review is undertaken, with potential new technologies or a sale as options under consideration. It remains to be seen if the UK government will weigh in to broker a sale to an acceptable buyer.

• Apple’s Supply Chain Changes with the Evolution of VCSEL Technologies

Likewise, another optical and photonics device manufacturer, Lumentum, has fallen into a similar situation. Per foreign media reports in March 2024, Lumentum would dismiss 750 staffs, which accounts for 10% of its global workforce at the time.

Lumentum is a core supplier of VCSEL lasers for Apple’s iPhone 14 Pro series. However, Ming-Chi Kuo, renowned Apple analyst, revealed in early 2023 that Sony would replace Lumentum in design, and become the exclusive supplier of VCSEL products for the LiDAR scanner in the iPhone 15 Pro series. This variation implies a reduced market share for Lumentum in the VCSEL segment of iPhone.

Indeed, Apple has consistently updated its technologies in smartphones, resulting in corresponding structural and design adjustments and changes in its supplier lineup.

TrendForce’s latest research report, “2024 Infrared Sensing Application Market and Branding Strategies,” shows iPhone 15 Pro adopts Sony’s stacked structure technology, which integrates the VCSEL, driver IC, SPAD, and ISP (ASIC Chip) in a stacked structure. This approach significantly reduces system size while achieving high-speed response and high output power, providing better LiDAR scanning performance at the same power level, extending battery lifespan, and enhancing camera and augmented reality capabilities.

Furthermore, TrendForce’s survey reveals that Apple plans to introduce MetaLens technology in 2024 to reduce the size of emitting components, and to adopt under-display 3D sensing technology in 2027 to increase the display screen ratio. Under-display 3D sensing uses short-wave infrared VCSEL (SWIR VCSEL) to reduce interference from sunlight and ambient light and minimize the occurrence of white spots. Noticeably, 1,130nm VCSEL has achieved a PCE (Photoelectric Conversion Efficiency) of over 30%, and currently, ams OSRAM’s 1,130nm VCSEL can already deliver superior performance, enabling it to come out on top in the market.

Thereby, it is evident that the continuous evolution of Apple’s iPhone 3D sensing solutions has caused striking changes in the VCSEL ecosystem. With new manufacturers like Sony entering the supply chain, Coherent and Lumentum are suffering a gradual decline in their market shares.

• More Opportunities Emerge amid the Overwhelming Trend of AI

While consumer electronics remain a crucial market for VCSEL technology, the global AI wave is driving its increasing importance in data center, optical communication, and automotive LiDAR, which will position VCSEL as a vital support for implementing AI functionalities. For example, VCSEL is a perfect fit for short-distance optical interconnections in data center, underpinning the operation of cloud and edge computing infrastructure integral to AI computing.

Currently, photonics manufacturers are already gearing up to develop higher-performance VCSEL technology to meet potential demands in high-growth application areas such as AI, high-performance computing (HPC), networking, and automotive LiDAR. In this context, VCSEL market demand and market size are expected to enjoy ongoing growth, presenting more opportunities for related manufacturers and infusing new vigour into their business growth.

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Cars are becoming smarter, introducing a new dimension to the world of “mobility.” However, amidst a plethora of fancy terms, what exactly is the future mode of mobility? What problems does it aim to solve? It is something worth delving into further.

When we discuss “future mobility,” do images of KITT, the AI sidekick from the TV show Knight Rider, or the autonomous vehicles from the movie Minority Report come to mind? While humanity is slowly turning science fiction scenarios into reality, the challenges in the real world are far from simple. First and foremost, we must understand why there is a need for new modes of mobility.

Human Driving Is Risky: Navigating the Path Forward for Autonomous Driving

The continuous evolution of automotive technology is primarily driven by the fact that human driving is too dangerous. According to the World Health Organization, approximately 1.19 million lives are lost to car accidents globally each year. Moreover, in most countries, the economic loss caused by traffic accidents amounts to about 3% of the national GDP. To reduce fatal accidents, automotive technologies keep advancing. The ultimate goal is to achieve fully autonomous driving so as to eliminate deadly traffic incidents caused by drunk driving, fatigue, distraction, or unfamiliarity with road conditions.

The discussion about the future of mobility inevitably begins with autonomous driving. As of 2024, global research and development in autonomous driving can be broadly divided into two camps: the “LiDAR and HD maps” faction, led by technology giants and established automakers, and the “vision-based” faction, represented by Tesla and an increasing number of Chinese automakers.

“Chinese automakers and automotive technology developers have recently shown a trend of moving away from the dependence on HD maps,” said TrendForce analyst Caroline Chen. “These companies include Huawei, XPeng, Li Auto, and Pony.ai, all of which have launched urban driving assistance systems that do not require HD maps.”

Chen pointed out that the high cost of HD maps, which have an error margin of less than one centimeter and a production cost of more than TWD 1,000 per kilometer, is the main reason automakers are gradually leaving this technology and searching for better alternatives.

The vision-based faction, led by Tesla, believes that increasing computing power and advances in software can synergize with sensors that are equal to or better than human vision. When this is achieved, computers can have the same driving ability as humans without being affected by physiological factors, thereby significantly reducing the risk of accidents.

Looking at the HD maps faction, Waymo, which is supported by Google, is its leader as it has made impressive achievements with this technology. Waymo’s autonomous taxi fleets are already operational in several US cities, including Phoenix, San Francisco, and Los Angeles. They have performed well with an extremely low number of accidents. However, this success story has been overshadowed by the issues that GM is facing in the development of its Cruise series of autonomous vehicles. Cruise, which also uses HD maps, has been suspended from road testing due to the frequent accidents it caused in San Francisco.

Key Components for Mobility of the Future

Although Taiwan does not have any major automakers leading the development of autonomous driving technologies, there are opportunities for local companies in the related supply chain. Autonomous driving essentially comprises the following three things: software, sensors, and electronic control components. Numerous Taiwan-based companies specialize in the development and provision of the latter two.

“Within a few years, autonomous driving software will grow rapidly, and the number of vehicles capable of reaching Level 3 to 4 autonomy will significantly increase,” Chen said. Although automakers have yet to achieve the higher levels of autonomous driving, they are quietly engaging in a competition to secure greater computing power. This strategy aims to prevent a potential scenario where hardware capabilities cannot keep up with the pace of software development. In fact, automakers are equipping their new vehicles with as much computing power as possible, even if it is not required at the moment. By doing so, they can later enhance the functions and features of their vehicles through over-the-air (OTA) software updates, thereby ensuring the market competitiveness of their products.

Despite the recent surge in demand for automotive components, analysts have pointed out that in the evolving industry ecosystem, which is leaning towards software-driven vehicle development, the demand for standardized components is gradually shrinking. Conversely, there has been significant growth in demand for customized components and parts. If Taiwan-based suppliers can leverage their flexibility and speed, they will be able to enter the supply chains of major automotive companies during this latest transition.

It is also worth noting that while the ultimate goal of fully autonomous driving has yet to be achieved, automakers have already recognized changes in the industry ecosystem. The traditional product development cycle of “minor modifications every three years and a major overhaul every eight years” is no longer suitable as vehicles need to be upgraded at a much faster pace to keep up with the latest technology trends. Moreover, as the computing power of onboard processors increases, the functionality of vehicles also expands. This has prompted automakers to shift their focus towards software as a source of profit.

Many automakers are now planning to offer subscription-based services, encouraging vehicle owners or operators to pay to unlock a variety of functions and features. For example, Kia’s EV9 comes with the option to purchase special patterns/animations for the headlights and displays. Mercedes-Benz and Porsche are working to develop a market for third-party automotive apps, thus replicating the existing ecosystem for mobile/smartphone apps. BMW came under the spotlight recently for locking certain features behind a paywall, such as heated seats and steering wheels. However, the company has since reverted the decision to make certain features a paid subscription service due to market feedback.

As established automakers explore ways to monetize automotive software, Tesla, which is leading the trend of software-based cars, offers “Full Self-Driving” (FSD) software for a price in excess of TWD 220,000. Tesla also provides a “Premium Connectivity Service” that enables its vehicles to access 4G networks, although the company has yet to start charging for this service.

Technologies and Business Models Fuel New Imaginations about Mobility

Aside from automakers exploring new avenues for revenue and profit, car owners also have opportunities to benefit economically from the latest technological advancements. Even though Uber’s business model for car sharing has been constrained by regulations and is gradually transforming into a ride-hailing service, these mobile service platforms have introduced a new strategy known as “shared car rentals.” Under this model, car owners can rent out their vehicles to others when they are not using them. After all, when car owners are working in office buildings or sleeping in their homes, their vehicles are idle assets that depreciate over time. By leveraging software, the internet, and smart vehicle unlocking technology, they can turn their vehicles into a source of passive income.

This idea can be taken further, leading to the creation of an “autonomous taxi fleet” that individual vehicles can join when their owners are not driving them. Computers will drive the vehicles to pick up passengers for a period, and then return to the owners’ homes or workplaces to pick them up when needed. Car owners will not only save on parking fees but also receive a portion of the taxi fare earned by their vehicles. At the same time, fleet operators save on the cost of purchasing vehicles, thereby creating a win-win situation.

Forty years ago, humanity envisioned future cars as companions that could pick up their owners on their own. Today, autonomous vehicle fleets are capable of doing just that. However, vehicles of the future are expected to do much more than simply transport people from one place to another. They are evolving into hubs for entertainment, work, and personal assistance. But before we reach that stage, is there a possibility that we could first eliminate the nightmare of highway congestion? Perhaps that day is closer than we think.

(Photo credit: Tesla)

From foundational propulsion systems to cutting-edge autonomous driving, new technologies in modern electric vehicles(EVs) are increasingly leaning on advanced PCBs.

In a state-of-the-art electric vehicle, chips on PCB control a broad range of functions from safety alerts to convenience systems. As additional components like communication, camera, sensor, and battery charging modules join the network, the collective value of PCB is set to rise dramatically.

TrendForce’s study suggests that electric vehicle penetration was at 18% of the global vehicle sales of 80.98 million in 2022. By 2026, it’s estimated to climb to 41% of 92.85 million global vehicle sales. This surge is expected to propel automotive PCB production value from $9.2 billion in 2022 to $14.5 billion in 2026, a 12% CAGR.

Notably, it’s not just quantity but also the average value per vehicle that’s seeing significant growth in PCB use. The rising battery capacity continues to drive PCB usage growth. The average PCB value for an all-electric vehicle is estimated to be a hefty 5 to 6 times that of a traditional gas-powered car. Key contributors to this are Battery Management Systems (BMS) and autonomous driving systems, which are greatly enhancing the overall worth of automotive PCBs.

BMS Embraces FPC as Standard

The electric control system, which makes up over half the value of a vehicle’s PCB, is now experiencing a technical transformation. One of the significant factors affecting the widespread adoption of EVs has been ‘range anxiety.’ Beyond enhancing battery energy density and increasing charging infrastructure, there’s a critical objective to lighten vehicles.

This focus is particularly relevant to the battery, which comprises a third of an electric vehicle’s weight.

In the key BMS systems, the use of FPCs (Flexible Printed Circuits) to replace traditional wiring harnesses is considered a major solution, mainly because FPCs reduce weight and space usage by more than 50% compared to harnesses and also perform better in terms of heat dissipation and design flexibility.

Based on a rough estimate, a mainstream vehicle battery pack requires 7 to 12 battery modules, each including 1 to 2 FPCs, putting the overall value of FPCs at approximately $60 to $210.

Currently, FPCs have a penetration rate of about 20% in BMS. However, as major automotive battery manufacturers like Tesla, CATL, and BYD continue to adopt and set FPCs as the mainstream specification, it is expected that by 2026, the proportion of FPC usage will reach 80%, further enhancing the PCB value content in the electrical control system.

Autonomous Vehicles to Fuel the HDI Demand

Advancements in autonomous driving technology are leading to an increased need for PCBs due to the rise in in-vehicle cameras and radar. Key applications like millimeter-wave radars and LiDAR necessitate advanced PCBs as carriers.

It is said that Tesla may reintroduce millimeter-wave radar, highlighting that this technology remains an indispensable component of autonomous vehicles. The PCB layer count for mainstream 77GHz millimeter-wave radar reaches 8 layers, adopting high-frequency CCLs.

The precision of LiDAR is about ten times that of millimeter-wave radar, which allows for accurate 3D modeling of information about the external environment of the vehicle, hence it is mainly used in L3 and above-level vehicles.

LiDAR primarily uses HDI (High-Density Interconnector), with each LiDAR module requiring about 4 PCBs. Compared to traditional 4 to 8-layer in-vehicle PCBs, the price of HDI is more than three times higher.

For Level 3 and above autonomous systems fitted with LIDAR, the HDIs used can cost tens of dollars. Although LiDAR’s adoption rate is currently slow due to regulatory and technical barriers, its high value offers significant potential for related components.

Another emerging trend is the development of smart cockpits, which comprise the Cockpit Domain Controller (CDC), in-vehicle infotainment system, driver information display system, Head-Up Display (HUD), dashcam, and so on. As the functions become more complex, there is a need for PCBs with higher wiring density and narrower line width and spacing, which will further drive the demand for HDI boards.

In summary, the incorporation of high-value PCBs in both the BMS and autonomous driving systems is still in its infancy. As cars become more intelligent and aim to serve as a ‘third living space,’ we can expect more innovative applications in the automotive industry, thereby providing exciting opportunities for the PCB sector.

As the pace of electrification accelerates in the global automotive market, and various governments worldwide implement subsidy policies that encourage consumer EV purchases, sales of new energy vehicles（NEV, which includes BEV/PHEV/FCV）are continuing to rise as well. NEV sales for 2021 are projected to reach 4.35 million units, a 49% increase YoY.

Due to the vast scale of the Chinese market, as well as domestic policies favorable for the growth of BEV/PHEV/FCV, various NEV brands have quickly emerged in China in recent years, such as BYD Auto, Aion（formerly GAC NE）, and BAIC BJEV. At the market’s peak, NEV manufacturers in China once numbered in the hundreds, although that number has since dwindled somewhat, as the intense competition resulted in declining sales and market shares for many automakers, including BAIC and JAC.

Four rising stars among emerging NEV manufacturers in China include NIO, XPeng, Lixian（or Li Auto）, and Weltmeister, all of which have been shipping tens of thousands of mass production vehicles each year. In particular, while NIO, XPeng, and Lixiang registered significant growths in the past few years, Weltmeister also ranked number two in terms of sales in 2019, though it fell to fourth place in 2020 as it delivered fewer vehicles compared to the top three competitors last year.

In light of the aforementioned four automakers’ current expansions, TrendForce has summarized several key aspects of their growths, including the following:

1. Autonomous Driving Technologies: Autonomous driving is not only part and parcel of these automakers’ core competencies but also a reflection of what consumers and investors expect of the automotive industry. In pursuing advanced autonomous driving technologies, the four automakers have been adopting increasingly powerful processors and computing platforms, with Nvidia being the most common partner among emerging NEV manufacturers. Remarkably, XPeng stands out as the only player making a noticeable effort to develop in-house chips.

2. LiDAR: LiDAR is integrated into an increasing number of vehicles in response to the growing demand for advanced self-driving functionalities. Although LiDAR remains out of reach for vehicles in certain price segments, autonomous driving sensors including LiDAR are no longer limited to flagship models since new NEV models’ E/E architectures are expected to be compatible with OTA updates.

LiDAR sensor demand from NEV manufacturers has significantly increased because only by pre-installing  hardware ahead of time in their vehicles can automakers enable autonomous driving functionalities as a paid subscription service through OTA updates later on.

3. Battery-swapping: Battery-swapping are relatively attractive for the Chinese NEV industry for several reasons: First, battery-swappable vehicles are excluded from China’s NEV subsidy limits*; second, automakers can now afford to lower the retail price of vehicles by turning batteries into a subscription service; finally, it’s much convenience for driver because battery swapping is faster than battery charging.

For instance, NIO’s entire NEV lineup is compatible with both battery charging and battery swapping. NIO has been pushing its BaaS（battery as a service）and  second-gen battery swap stations since 2020. On the other hand, Weltmeister and XPeng are also making their respective battery-swapping strategies.

4. Capacity Expansion and Overseas Strategies: The aforementioned four automakers all place a heavy emphasis on both expanding their production capacities and growing their overseas market shares. Their capacity expansion efforts include building in-house production lines, acquiring other facilities, or jointly funding automotive production with OEMs/ODMs. Regarding overseas expansion, their primary destination is the European market, which is relatively favorable to NEVs.

For instance, NIO and XPeng choose Norway as their first target market in Europe. However, while the European automotive market is conducive to the growth of NEVs in terms of both policies and cultures, competition among automakers is also correspondingly intense. In addition, most European countries prefer either domestic brands or other European brands. Therefore, Chinese automakers must prioritize gaining consumer trust via establishing a trustworthy brand image.

*China’s subsidies for NEV purchases are restricted to NEVs with a retail price of CN¥300,000 and under. However, NEVs with swappable batteries do not fall under this restriction.

（Cover image source: Unsplash）