[Source/Observer Network Zhang Jiadong, Editor Gao Shen]

According to a report by Nikkei Asia on April 16, Japanese automakers and suppliers are taking industry-wide actions to enhance their competitiveness against leading Chinese rivals in the smart car race.

Last year, led by Toyota, Nissan, and Honda, a total of 12 Japanese automakers, parts manufacturers, and five semiconductor companies formed a semiconductor alliance named ASRA (Automotive Advanced SoC Research).

It is reported that the alliance is currently leading discussions on creating standardized designs for next-generation automotive chips and hopes to complete the design by March 2029.

Nobuaki Kawahara, executive director of ASRA and senior advisor at Denso, said, "Japan is still behind in terms of having the appropriate hardware to ensure real-time control, functional safety, and the ability to reliably run software."

In addition, he mentioned that Japanese automakers may be two to three years behind China in SDVs (software-defined vehicles) partly because Chinese and other leading electric vehicle manufacturers "prefer to choose software first and then ensure the right hardware later."

Kawahara stated that Japanese automotive giants tend to prioritize automobile hardware before deciding on the software and semiconductors that control the hardware, which often results in slower development speeds.

Chinese Automakers Penetrating Southeast Asian Markets Nikkei Asia

In recent years, Chinese automakers such as BYD, Geely, and Chery have seized market share previously dominated by Japanese and European manufacturers, thanks to their intelligent vehicles and electric vehicles, both domestically and in other Asian economies.

Data released by automotive research firm MarkLines shows that by 2024, Chinese automakers' market share in Thailand reached 7%, a significant increase from 2.3% five years ago. In Indonesia, it rose from 0.4% to 2.9%. By contrast, Japanese automakers' total market share has fallen nearly 10 percentage points over the past five years.

2024 Digital Automotive Manufacturer Index Gartner

The 2024 Digital Automotive Manufacturer Index released by Gartner (which evaluates the degree to which automotive companies integrate software into business decisions and the digitalization level of their vehicles) shows that Toyota ranked 20th among 22 automotive manufacturers. Honda, Nissan, and Mazda also ranked near the bottom.

Nikkei Asia stated that with the establishment of ASRA, Japanese automakers are becoming aware of the importance of accelerating SDV for the market and plan to launch a counterattack.

Currently, the alliance is attempting to develop a foundational chip design to meet the needs of multiple automakers within the alliance as much as possible, saving time and costs for automakers.

Thaddeus Fortenberry, vice president of Tenstorrent's automotive division, said that the difference between Chinese and Japanese intelligent vehicles does not lie in the functionality of the chips used. "Chinese automakers are more concerned about two things—how quickly can they get the chips? What is the cost?"

He believes that standardizing chip designs and making them open source could create more competitors in this field, thereby reducing chip prices and costs, which is one way for Japanese and Western automakers to narrow the gap with Chinese competitors. "If I were Toyota, I wouldn't directly participate in the competition to lower silicon prices, but I hope to benefit in the long-term market."

An analyst from industry research firm Omdia stated that since automotive chips are significantly cheaper than artificial intelligence chips used in data centers and have smaller production volumes, while the manufacturing process for cutting-edge automotive chips is equally complex, profits from automotive chips are not as high as those from data center or personal computer chips. Therefore, the automotive industry may not be a top priority for semiconductor foundries.

Kawahara also agreed, stating, "In terms of production volume, automobiles are not very attractive to chip suppliers, especially compared to smartphones or data centers. But if we can achieve platform standardization, the production volume of basic chips may be quite substantial—this will greatly facilitate supplier production."

According to Deloitte's forecast, by 2025, the automotive industry will account for 12.7% of total semiconductor demand, while the data processing and communications industries are expected to account for 32.9% and 30.2%, respectively.

Kawahara also mentioned that ASRA is one of the first industry organizations globally where automotive manufacturers and suppliers attempt to collaborate on chip research. If successful, this could help Japan participate in the work of formulating international standards.

This article is an exclusive piece from Observer Network and cannot be reprinted without permission.

Original Source: https://www.toutiao.com/article/7493841636774920767/

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