Lansheng Technology: Automotive chips become bright spot

Rising sales of electric vehicles -- which tend to use more semiconductors than gasoline-powered cars -- combined with greater automation in all vehicles have kept car chip makers busy. Tesla CEO Elon Musk said last week that the long-term outlook for the market appeared to be strong, detailing his car company's plan to expand annual vehicle production to 20 million vehicles by 2030 from about 1.3 million in 2022 car.

Chip executives say the growth in the number of chips used in cars is staggering. By 2021, the average car will have about 1,200 chips, twice as many as in 2010, and that number is likely to rise, executives said.

Including Dutch automotive chip company NXP, German chip company Infineon, Japanese company Renesas and American companies TI and ADI are important players in this market.

Auto-related revenue should grow more than 30% in the current quarter, even as the company's overall revenue is expected to shrink, Matthew Murphy, chief executive of Marvell Corp of America, said on Thursday. The company's auto-related chip sales could reach $500 million in the next few years, up from about $100 million now, he said.

NXP's automotive chip sales rose 25 percent last year, and the company said it expects growth of about 15 percent in the first quarter of this year. Renesas' automotive business grew nearly 40 percent last year, and analysts expect more growth this quarter. Nearly a quarter of Analog Devices' sales come from the automotive industry, which grew 29 percent last year.

It’s not just the cars themselves that are getting more chip-intensive; semiconductor executives say so is auto production as manufacturers adopt greater automation to cope with labor shortages and try to keep costs down.

Chip companies are generally preparing to increase production capacity to meet rising automotive demand and expect a rebound in other industries such as PCs and smartphones. Texas Instruments said last month it would build an $11 billion chip factory in Lehi, Utah, and NXP said it was considering expanding in Texas.

Lansheng Technology Limited is a global distributor of electronic components that has been established for more than 10 years, headquartered in Shenzhen China, who mainly focuses on electronic spot stocks.

https://www.lanshengic.com/