Key ideas:
From the background of the automobile industry, the sales of new energy vehicles are increasing, and the automobile semiconductor boom is continuing: the automobile "three" process is accelerating, and the demand for all kinds of automobile semiconductor has been increased to varying degrees. The automobile gauge MCU is a kind of on-board chip with a wide range of application scenarios, and the automobile gauge MCU has a broad market prospect. From the perspective of short-term major events: vehicle gauge MCU is one of the "leading roles" of this round of "core deficiency" event, multiple factors contributed to a serious automotive industry chain "core deficiency" crisis, which led to the global automotive production encountered great difficulties, at this stage vehicle gauge MCU is still one of the most scarce types of many automotive chips.
The medium - and long-term development trend shows that the epidemic will eventually pass and the general trend of development is unstoppable. Automotive electronic and electrical (E/E) architecture is changing, and the demand for MCU will change accordingly. We forecast the market size of car-regulated MCU in the period of "14th Five-Year Plan". Under the optimistic expectation based on the penetration rate of new energy vehicles exceeding expectations, the market size of car-regulated MCU in China from 2022 to 2025 is 33.63, 37.53, 41.66, 4.593 billion dollars respectively. CAGR in 2021-2025 is 11.22%. At present, the import rate of automotive chips in China is as high as 95%, and Chinese automobiles are the largest market for automotive gauge chips. Extraordinary times give rise to historical opportunities, domestic manufacturers are expected to rise, in the semiconductor domestic replacement of the main line of another golden track.
01. From automotive electronics industry chain to car gauge MCU chip
1.1. Automotive electronics industry chain
With the continuous improvement of functional permeability of ADAS, the proportion of on-board electronic value increased rapidly from 5% in the 1970s to 35% in 2010, and the proportion of on-board electric is expected to reach 50% in the future. All electronic parts need semiconductors. With the development of electrification, intellectualization and networking, chips are more and more widely used in automobiles, and the content of semi-conductance is higher and higher.
1.2. Automotive Semiconductor Overview
In order to realize more complex automotive functions, domain controller technology (DCU) is needed, and domain controller SoC chip becomes more and more prominent. (Report source: Future Think Tank)
1.3. Overview of MCU
Microcontroller Unit (Microcontroller Unit), named microcontroller unit or single chip, is a chip level computer that reduces the frequency and specifications of the central processing unit and integrates the contents of memory, counter and peripheral interface into a single chip. Widely used in consumer electronics, Internet of Things, automotive electronics, industrial control and other fields.
1.4. Classification and application of vehicle gauge MCU
8-bit MCU: Provides low-end control functions: fan control, air conditioning control, windshield wiper, sunroof, window lifting, low-end dashboard, hub box, seat control, gating module. 16-bit MCU: provides mid-range control functions: for power systems, such as engine control, gear and disconnector control and electronic turbine systems, etc. For chassis, such as suspension system, electronic power steering wheel, torque distributed control and electronic pump, electronic brake, etc. 32-bit MCU: Provides high-end control functions: plays an important role in the realization of L1 and L2 autonomous driving functions, such as dashboard control, body control, multimedia information system, engine control, as well as emerging intelligence and real-time safety systems and power systems.
02. Event: Lack of core tide of auto parts -- short-term supply and demand of car gauge MCU
2.1. Event: Car core shortage
Typically, it takes 12-16 weeks for an MCU to complete in-house production. The shortage of MCUS is even more pronounced when compared to 22Q1, with most MCUS in short supply, especially stmicroelectronics and NXP. The in-car MCU is currently only available from Renesas and Cypress with a 32-45 week lead time, while other brands are in short supply. In 2022, car MCU orders are nearly full and prices continue to rise. Among them, stmicroelectronics announced on March 24 that it would raise prices across all product lines in the second quarter. Today, the demand for MCUS is not just about numbers. With the promotion of emerging industries, new requirements for low power consumption, high computing power, customized and dedicated peripherals are gradually increasing.
At present, MCU can be divided into consumer MCU, industrial MCU and automotive MCU according to different indicators. Different MCU has different requirements for the rate of good products. Consumer MCU pays attention to power consumption and cost, industrial MCU pays attention to balance new energy, power consumption, cost and reliability, and automotive MCU pays attention to safety and reliability. The increasingly stringent requirements for the MCU themselves and the increasingly high-end production lines are one of the most difficult reasons to build a car MCU.
2.2. Summary: short-term supply and demand of the market
The automotive segment will remain the leader: The automotive applications segment accounted for over 35% of the market in 2020 and is expected to grow at around 10% through 2027.
Automotive chip factories and wafer foundries have increased raw material costs, the epidemic has affected supply chain factors, and the overall production cycle has become longer, requiring advanced process nodes lower than 40 nm. Depending on the high product consistency requirements of the foundries' technology, the production line cannot be changed at will, and the supplier's vehicle gauge level chip has a high threshold. In a short time, other manufacturers can not pass the certification quickly. It still needs a long period from investment in capacity expansion to capacity growth. (Report source: Future Think Tank)
3. Mid-term analysis and long-term prospect of vehicle gauge MCU
3.1. Automotive E/E (Electronic and electrical) architecture
With the gradual increase of vehicle functions, especially after the automobile "three", the traditional distributed architecture to increase the vehicle function by adding ECUs, there is a waste of computing power, the interior line is complicated, the use efficiency of automobile space is low, the system upgrade is difficult, the marginal cost of new ECUs increases and other drawbacks, the domain controller reasonable integration of ECUs function is the general trend.
This analysis: after the end of the "core absence" event, the supply and demand of vehicle gauge MCU returns to normal, and the impact of the continuous evolution of automobile "three chemical" and electronic and electrical architecture from distributed to domain control on the demand of vehicle gauge MCU is the definition and premise of this "interim" analysis. More cutting-edge E/E architecture ideas will not be discussed for now.
3.2. Mid-term changes of Bosch five-domain division vehicle MCU
Advanced Driving Assistance System ADAS (Advanced Driving Assistance System) is a vehicle function system that obtains information about the body, environment and human body through on-board sensors and implements driving assistance to further realize autonomous driving. ADAS mainly includes active safety, driving comfort, parking assistance and other functions. At present, the Chinese automobile market is still in the stage of L2 high-speed penetration. Considering the cost and performance comprehensively, the new ADAS function still adopts the distributed architecture.
One of the main roles of the MCU in an autopilot domain controller is as a safety core, which is added to prevent unexpected hardware failures and to provide a safe backup solution in case of an abnormal state or a single failure. The vehicle gauge ISO 26262 functional safety standard described above is the safety standard for the automotive industry, and the design of qualified vehicle gauge SOCs must comply with this standard.
3.3. Interim summary and analysis of long-term trends
Based on these trends, we believe there should still be a place for the MCU to control traditional functions, and less use for the cockpit and autonomous driving. With the further development of E/E architecture, there will be a convergence of cockpit and autonomous driving domains until a central computer control architecture for the whole vehicle, and possibly a central computer in the cloud in the future. Future vehicles are highly intelligent, and after automation, the long-term demand for vehicle MCU may show a downward trend. Conclusion: The process of automobile electrification and intellectualization in the medium term promotes the increase of demand for automotive MCU.
04. Global market competition pattern and domestic substitution opportunities & Market size forecast
4.1. Automotive semiconductor industry overview
At present, the self-supply rate of automotive chips in China is less than 10%, and the localization rate is only 5%. The supply is highly dependent on the foreign demand side: Chinese automobiles account for about 30% of the world, which is the market with the largest demand for car-gauge chips: The import rate of automotive chips in China is as high as 95%, and key chips used in functions such as powertrain, chassis control and ADAS are monopolized by foreign giants.
4.2. Competition pattern of vehicle gauge MCU
The global automotive MCU market is highly concentrated and has a light-fabs strategy, which relies on wafer foundries to convert technology into chip products. On the supply side, TSMC accounts for about 60-70% of all outsourced MCU shipments, but automotive chips account for only 3% of total revenue. The strong dependence of top manufacturers on TSMC amplified the contradiction of mismatch between supply and demand: TSMC reduced the capacity allocation of MCU due to the epidemic, and the demand for TSMC chip exceeded supply after the terminal demand increased.
4.3. Domestic substitution trend and manufacturer industrialization process
Local manufacturers in car gauge MCU market share is small, can develop space; The macro market impact intensifies the urgency of localization replacement, MCU continues to be out of stock, and overseas large factories limited new capacity, domestic substitution trend continues; Policy support, promote MCU research and development and industrialization, maintain the stable operation of the automobile industry.
4.4. Market size forecast
The forecast time range refers to the medium term and the 14th Five-Year Plan period mentioned above in this paper, that is, the development assumptions for 2022-2025 are made based on the historical data of 2019-2021. The goal of the 14th Five-Year Plan for energy conservation and emission Reduction is that the penetration rate of new energy vehicles in China will reach around 20% by 2025. Based on the current situation of rapid monthly volume expansion in the new energy vehicle market, the penetration rate of new energy vehicles since 2022 is 17%, 19%, 22%, 25% and 24% respectively. Considering that the overall vehicle sales are at a low point in recent years, The penetration rate refers to the proportion of new-energy vehicle sales in the total automobile sales. The rapid increase of the penetration rate does not mean the high popularity of new-energy vehicles. Therefore, we give the penetration rate of new-energy vehicles in 2025 a careful expectation of 25% and an optimistic expectation of 30%. (Report source: Future Think Tank)