The Automotive Industry

The semiconductor industry performed better than expected in 2020 despite the impact of COVID-19 on the global economy and is preparing for accelerated growth in 2021 and beyond. The global coronavirus pandemic significantly increased demand for communications electronics and fueled the growth in cloud computing to support remote work and learning. Semiconductor manufacturers, many running at peak capacity, continue to produce critical chips that go into virtually every electronic device made, including computers, 5G network infrastructure, smartphones, automotive, TV, home appliances, data networks, medical equipment and much more. In fact, this explosive demand is outpacing manufacturing and lead times in many markets. This unprecedented situation has brought to light the sheer numbers of semiconductor chips integrated in automobiles and their criticality to the basic vehicle operation and functionality. Let’s take a longer drive into this dynamic automotive topic and explore some key innovations, trends and opportunities enabled by the semiconductor industry.

The Automobile and The Consumer

Automobiles are an essential part of our lives as the main mode of transportation today. Currently there are over 1.3 billion motor vehicles on the road in the world, with that number expected to rise to 1.8 billion by 2035.¹ Passenger cars comprise roughly 74% of these statistics, while light commercial vehicles and heavy trucks, buses, coaches and minibuses make up the remaining 26%.² Automobiles offer us convenience and functionality – the unique ability to travel independently, typically on-demand, where and when we choose. We depend upon the vehicle’s performance, reliability and safety to carry out our working and personal lifestyles, each day, every week, and expect years of consistent, dependable product lifecycle performance. It should come as no surprise that reliability and safety are critical decision factors for the consumer when purchasing a vehicle and are also top concerns of automotive manufacturers to protect their customers.

When it’s time to buy or lease a new automobile, many people turn to the internet to research a plethora of specifications, including make, model, style, drivetrain, features, functionality, vehicle quality, reliability, rankings, pricing, incentives, performance and reviews. Surveys of consumer behavior around car purchases reveal our practicality: looks, safety, fuel economy and manufacturing quality all make the top ten list of reasons for buying a car. And yet one of the top reasons for making a car purchase decision remains reliability^3,4 and the vehicle’s ability to maintain the safety of its passengers, other people and surroundings while in use. Let’s take a brief, high level view of the automotive industry, how it has transformed over the years, and some of the projections experts have made. Then we will touch on the innovations and key inflections that drive the critical value of semiconductor device content in automobiles. And lastly, we will connect KLA’s role in semiconductor process control to support this evolving industry.

Automobile Innovations

Through the years there have been an enormous number of innovations in the automotive industry,^5,6 including: the Ford Model T (1908), radios (1933), keys (1949), air conditioning (1953), seat belts (1958), electric windows (1960s), anti-lock brakes (1971), digital dashboard displays (1974), air bags (1974), on board diagnostics (1994), hybrid vehicles (1997), GPS satellite navigation (2000), advanced driver assistance systems (ADAS; 2010s), and autonomous driving (now and improving). Today’s evolving automotive market is being driven by several key areas, most notably connectivity, electrification and autonomous driving.^7,8 People are attracted and eager to have these features and functionality, so let’s take a little closer look at this trend.

Connectivity

Hands free mobile services and onboard navigation are standard in most vehicles today. Improvements continue in telematics, GPS navigation, remote access, emergency services, collision notification, voice assistance, integrated mobile apps, pop-up displays, 3D mapping and more. Vehicle to vehicle connectivity supported by 5G will increase. Gartner, a global technology research firm, estimated that by 2020 end there will be a whopping 50 billion IoT devices installed worldwide—many of them in our cars.⁷ Connectivity strongly influences vehicle purchase decisions and may have an even greater impact in the future.⁸

Electrification

The combined annual sales of battery electric vehicles and plug-in hybrid electric vehicles tipped over the two-million-vehicle mark for the first time in 2019 and staked a 2.5% share of all new car sales.⁹ Despite the impact of the global pandemic, the EV market is expected to rebound with continued growth. Deloitte’s global EV forecast is a compound annual growth rate (CAGR) of 29% achieved over the next ten years: total EV sales growing from 2.5 million in 2020 to 11.2 million in 2025, then reaching 31.1 million by 2030.

Autonomous Driving

There are five levels in the evolution of autonomous driving. Over the past few years, we’ve seen increased adoption of level 1 ADAS, including improved lidar distance sensing, lane departure controls, blind side detection, adaptive cruise control, and improved camera sensors. Automotive manufacturers currently produce vehicles at level 2 and many manufacturers are demonstrating (some) functionality of level 3. The ultimate level 5 will not require a driver at all, a vision that many are excited to embrace, once all the complex, inter- and intra-dependent technologies and infrastructure are established, tested and well proven. Imagine being driven to your destination, while working at your PC, conducting a video conference, enjoying a meal, or watching TV show or a movie. How cool is that going to be?

Innovations in automotive connectivity, electrification and autonomous driving are largely achieved by the integration of more electronics, which are powered by significant, and growing, silicon content. In fact, at the core of today’s vehicles are thousands of semiconductor chips that serve as the vehicle’s eyes, ears, and brain – sensing surroundings, making decisions, and controlling actions. Modern automobiles may have 8,000 or more semiconductor chips,¹⁰ and over 100 electronic control units, which currently carry more than 35% of the total vehicle cost – a number expected to increase to 50% by the year 2030.¹¹ Gartner reports the automotive electronics sector will experience the greatest semiconductor compound growth rate over the next four years, through 2024, at 9.3%.¹²

There is one simple fact about these thousands of chips found in a car: they simply cannot fail. Yet, more than half of semiconductor failures on the automotive assembly line today (so-called 0km failures) are traced to the defectivity coming from the semiconductor fabrication process.¹³ And certainly, any chip that fails in the field can result in costly recalls and warranty repairs, damage the image of the automaker’s brand, and worst case, result in personal injury or even loss of life. SEMI has been actively championing traceability standards throughout the automotive supply chain. Doug Suerich, product evangelist at PEER Group and an active participant in the SEMI Standards Traceability Committee, has said, “It comes down to a safety issue. We need the ability to collect data across the supply chain, so we can trace down the source of a reliability issue, analyze the data and take corrective actions around applications for which safety is critical. Automotive, medical, and aerospace devices need to keep working over five, ten or even more years. For the semiconductor industry, that means redefining yield.¹⁴”

KLA’s Role in the Automotive Market

That brings us to KLA, the leaders in process control and yield management, and our critical role in this industry. In 2019, KLA was the first semiconductor equipment company to be accepted as Associate Member of the Automotive Electronic Council (AEC), the organization that sets qualification standards for electronic components in the automotive industry. We’re excited to be establishing a second North American headquarters in Ann Arbor, Michigan, where we have been expanding our R&D programs with a focus on AI, in close proximity to the heart of the US automotive industry.

Today’s high semiconductor demand, much of it driven by communication and consumer electronics – which would normally be considered a “good problem” – has caused some supply chain issues impacting automobile production, PCs, home appliances and more. Many fabs are running at 100% capacity and cannot simply add new wafer starts; planned new fabs and expansions cannot solve the problem in the short term. One opportunity to deliver more functional (and reliable) chips to the automotive manufacturers is to improve wafer fab and final test yield where these much-needed chips are being manufactured. 

Today, KLA’s inspection, metrology, data analytics, and innovative die screening solutions are helping auto IC manufacturers enhance process control methodologies and improve yield. We help chip manufacturers implement Zero Defect strategies aimed at optimizing the reliability of automotive electronics by finding and isolating latent reliability defects inline, helping prevent chips with a high potential for failure from ever leaving the fab. Our collaborative work with several semiconductor manufacturers and OEM auto manufacturers has brought forward unique process control and screening strategies that improve chip quality, fab output yield, reliability, and lower overall costs.

Please visit our automotive solutions page and ‘drive’ to the bottom portion of the page to access KLA workshop presentations, Process Watch articles and a variety of other publications specific to automotive. We encourage you to share this article with your colleagues. We also invite you to contact your local KLA technical team to discuss how we can assist with your automotive chip reliability goals. We are here to help you and your team drive quality, tighten process controls, improve your yield and product reliability, and elevate your customers’ satisfaction with you as a key supplier and partner in the automotive ecosystem.

Buckle up for this exciting, dynamic and growing automotive journey.

Drive safely and always Keep Looking Ahead™!

References:

1. https://www.live-counter.com/number-of-cars/
2. https://www.worldometers.info/cars/ 
3. https://www.nydailynews.com/autos/buyers-guide/10-top-reasons-people-buy-specific-cars-article-1.2552707
4. https://www.cargurus.com/Cars/articles/10_good_reasons_to_buy_a_new_car
5. https://news.jardinemotors.co.uk/lifestyle/the-history-of-car-technology
6. https://www.softschools.com/timelines/car_timeline/224/
7. https://www.wired.com/brandlab/2016/02/how-connectivity-is-driving-the-future-of-the-car/
8. https://www.mckinsey.com/industries/semiconductors/our-insights/mobility-trends-whats-ahead-for-automotive-semiconductors
9. https://www2.deloitte.com/uk/en/insights/focus/future-of-mobility/electric-vehicle-trends-2030.html
10. Senftleben and Froehlich, Aspects of Semiconductor Quality from an OEM Perspective, April 2017
11. https://www.statista.com/statistics/277931/automotive-electronics-cost-as-a-share-of-total-car-cost-worldwide/
12. Gartner Semiconductor Forecast Database, Worldwide, 3Q20 Update
13. https://blog.semi.org/technology-trends/automotive-trends-chip-traceability-zero-defects-and-collaboration
14. https://blog.semi.org/technology-trends/automotive-driving-traceability?hs_preview=HeprKiUo-11520026950