Break through against the wind! Taiwanese manufacturers collaborate with NXP to capitalize on new-generation automotive electronics opportunities.

2025/01/14

TechNews
December 29, 2024
Author: WEALTH MAGAZINE

The global automotive market has seen a sharp rise in Chinese electric vehicles this year, which has slowed down the growth of electric vehicles. Within half a year, Pegatron, Inventec, and Wistron have successively established joint laboratories with major automotive semiconductor manufacturers, targeting the new generation Automotive electronics market.

According to the biweekly report of Caixun, in just half a year, NXP, a major automotive semiconductor manufacturer, has established joint laboratories with major electronics manufacturing foundries such as Pegatron, Inventec and Wistron. With electric car manufacturer BYD rising rapidly and demand in the automotive market sluggish, what growth potential do they see?

TSMC fired the first shot at its earnings conference in April 2024, lowering the demand for automotive chips from growth to decline. As expected, after entering the second half of the year, STMicroelectronics, a major automotive semiconductor manufacturer, lowered its 2024 revenue target for the second time. NXP also recently announced that its fourth-quarter 2024 revenue and profits will be lower than expected, causing its stock price to plummet in response.

Opportunity: Electronics industry brings car manufacturers closer

Although the automotive electronics market has encountered headwinds in the short term, it has not hindered Taiwan's major electronics manufacturing companies from deepening their layout. Foxconn, Delta Electronics, Pegatron, Inventec, and Wistron have all chosen to set up joint laboratories with NXP, which has been rooted in Taiwan for 57 years, to develop new-generation products.

Two years ago, Inventec held a press conference on its strategic cooperation with NXP at its Daxi plant in Taoyuan. At that time, the focus was on developing products such as central gateways, in-vehicle servers and in-vehicle wireless charging. This time, Inventec General Manager Cai Zhian emphasized that he will continue to deepen his automotive electronics business and expects to adopt NXP's ultra-wideband (UWB) technology to develop more new products.

UWB is a carrier-free communication technology with the advantages of strong anti-interference, high-speed transmission, high security and low power consumption. Its transmission rate is 159 times that of Bluetooth and 18.5 times that of Wi-Fi standard, and it can position. The cooperation between Inventec and NXP will be applied in smart car security access control, child sensing system and rear kick sensing, etc. In addition, Inventec has already completed the layout of its global production lines, including Taiwan, Shanghai, China, Mexico, the United States, Europe, etc., and will continue to increase in the future. In 2024, the revenue from automotive applications will grow exponentially, and in 2025, the revenue will double again. times.

Let’s turn the scene to the cooperation plan between Pegatron, Wistron and NXP. Zang Yiqun, general manager of NXP Semiconductors Taiwan business, said that the cooperation with Pegatron will start with smart cockpits and electronic and electrical architecture, and hopes to further cooperate in advanced driver assistance systems and power systems in the future.

As for Wistron, the joint laboratory with NXP is equipped with an advanced automotive communication verification and development environment, focusing on the core technologies of vehicle computer systems and central control units. Wistron Chairman Lin Xianming pointed out that the company has made considerable achievements in the development of automotive display and control panel business in the past and will now move on to higher-level projects.

It is not difficult to find that the three major electronics factories focus on different projects. According to He Xinyu, an industry consultant at IIF, NXP hopes to attract more customers to use its products through this cooperation mode; and the electronic manufacturing OEMs can use this to shorten the distance of cooperation with car manufacturers and even skip the first stage. (Tier-1) suppliers have the opportunity to fully introduce new-generation products into new car models. Of course, the cooperation partners of major electronic manufacturing foundries are not limited to NXP, but also include major chip manufacturers such as Nvidia, Qualcomm, and MediaTek.

Advantages: The U.S. supply chain is more exclusive

Although Chinese automakers are actively building their own supply chains, coupled with the slowdown in the growth of non-Chinese electric vehicles, the market is quite worried about the future prospects of the automotive electronics industry, but Taiwanese manufacturers are not without opportunities. "From now on, the US market will be more exclusive of the Chinese supply chain. Not only can the products not be shipped from China, but even the identity of the manufacturer cannot be Chinese." He Xinyu believes that the supply chain of the automotive market will also be very clearly divided in the future.

Chen Jusan, secretary general of the Taiwan Advanced Automotive Technology Development Association, also emphasized that smart cockpits have become standard equipment for future cars, whether they are fuel-powered or electric. The various car systems derived from them range from displays, audio-visual entertainment, and car computers. , Internet of Vehicles, and autonomous driving are all areas that Taiwanese manufacturers are actively focusing on.

Therefore, although the automotive electronics market is currently facing headwinds, the operation of automotive electronics requires a long-term battle. Pegatron co-CEO Zheng Guangzhi once said that current products are designed to meet the demand for new cars three years from now. Because the verification time starts from 3 years. Taiwan's strengths are in information and communication technology and products. After cooperating with international automotive semiconductor manufacturers, it can enter the new generation of automotive electronic products at mid-range prices. I believe that this is very important for American or European car manufacturers. Good opportunity point.

Lin Xianming said directly that Wistron is optimistic about the long-term prospects of automotive electronics and aims to reach 100 billion yuan in revenue within 10 years; Inventec Chairman Ye Licheng also called on the automotive electronics business to challenge the revenue contribution of 100 billion yuan by 2027. While the market focus is on AI servers, I believe the future potential of automotive electronics is still worth looking forward to.

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