Semiconductor Industry: A Key Component in the Automotive Ecosystem

Published Date

August 1, 2020


4 minutes

Written By

ACL Digital

Considered as one of the largest contributors in the global technological developments, the semiconductor industry has been exponentially growing every year. With the advent of technologies like 5G communication, Artificial Intelligence (AI), autonomous cars, and Internet of Things (Iot), the global semiconductor industry has seen a lot of advancement over the years.

From AI-powered drones and level-three autonomous vehicles to digital supply network technologies, the future belongs to semiconductor industry which has the capability to improve the quality of life for mankind in several ways.

Automotive and Semiconductor industry goes hand-in-hand

Being a knowledge intensive and capital-intensive industry, the automobile industry is one of the most important industries for any country as it plays an important role in its socio-economic development. Owing to its backward relation with almost every sector and segment of the economy, including raw materials, construction, machinery, legal, semiconductors, financial, IT, advertising, and healthcare, it becomes imperative that the role of the automobile industry in the development of the modern economy is unarguably critical. 
The semiconductor industry has an important role to play in the automotive industry supply chain. Semiconductors act as the catalyst for the growth and innovations in vehicle development driven by the consumer’s demand. Different types of semiconductor ICs, like navigation control, infotainment systems and collision detection systems, have become the need of the modern vehicle.

The road ahead for the Automotive Semiconductor Market

The semiconductor industry is the backbone of all kinds of digital devices in the modern era. Some of the recent innovations in the automotive industry facilitated by semiconductor are:
Connected cars: In a traditional automotive architecture, the Infotainment, Telematics, and Diagnostics acted as silos with almost no communication between them. The connected cars bring these components together through real-time communication systems enhancing the user experience.
Autonomous vehicles: An autonomous vehicle works on a fully automated driving system. Its in-built system allows the vehicle to respond to external conditions that a human driver would manage.

Electric vehicles: An electric vehicle (EV) is a vehicle that operates on an electric motor as against the traditional fuel vehicle which runs on an internal-combustion engine that generates power by burning a mix of fuel and gases. One of the major features of an EV is that it can be plugged in to charge from an off-board electric power source.

In-vehicle infotainment: Unlike the tradition infotainment system, the modern in-vehicle infotainment systems connect with all the smart automotive technologies like ADAS systems, V2X connectivity solutions, telematics devices, smartphones, and sensors. It integrates all these technologies with each other to provide a great driving experience.

Cloud connectivity: Cloud connectivity enables a safer and better informed driving experience leveraging high-speed and in-vehicle data networks.

Digital cockpits: An important component of the connected cars and autonomous vehicles, the digital cockpit is a setup consisting of multiple screens, digital assistants and different means of input for enhanced digital experience.


To conclude, it’s an undeniable fact that the semiconductor industry has a primal position in facilitating and enabling today’s technologically driven world. For the automotive industry, it has redefined the architecture for next-generation vehicle experiences through its innovative technologies like sensors for imaging and ranging, vision-based processing, neuromorphic chipsets, and hardware-level security. With a volatile history and immense growth possibilities in the future, the semiconductor industry still has a long way to go.

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ACL Digital