SiEngine Technology — a unit of China’s leading private automaker Zhejiang Geely Holding Group — unveiled Dragonhawk 1, a cutting-edge automotive chipset, this month.
“Semiconductors are extremely important for the country,” Geely Chairman Eric Li said at the Dec 10 unveiling. “They are the key to establishing secure and stable supply chains.”
Dragonhawk 1 is designed to serve as the brain behind smart cockpits, which include dashboard displays, navigation systems and cloud-based services. Built with 7-nm technology, it is one of the most advanced automotive systems on a chip in the world.
Mass production is to begin in the July-September quarter, and the chips are expected to be incorporated into Geely vehicles by the end of next year. It will allow the cars to quickly process images and other data collected by driver-assistance systems, as well as external communications.
SiEngine was formed by Geely unit EcarX and Arm China, the local unit of British chipmaker Arm. It aims to launch a new 5-nm chip as early as 2024 to meet the demands of increasingly sophisticated self-driving technologies.
Geely is not alone. SAIC-GM-Wuling Automobile, a joint venture between China’s state-owned SAIC Motor and General Motors, has also begun developing its own chips.
The company is known for producing affordable electric vehicles priced at about US$4,500. It plans for at least 90% of chips used in its EVs to be made in China by 2025, local media report.
Dongfeng Motor has begun mass production of power semiconductor modules for new energy vehicles, while BYD looks to list a semiconductor unit to bolster development capabilities.
These moves come as Chinese President Xi Jinping has called for building strong domestic supply chains that are less vulnerable to US sanctions and the coronavirus pandemic.
Chips in particular have been a concern, with US export curbs on the component dealing a heavy blow to companies like Huawei Technologies.
Automakers are making inroads into semiconductors beyond China as well. Volkswagen and Tesla are developing automotive chips, while the Toyota Motor group already produces some of its own.
But Chinese players are believed to have been less interested in in-house chips and greater supply chain issues until recently, partly because they were more focused on joint ventures with overseas players.
China is said to have a self-sufficiency ratio of about 20% for all semiconductors, and 5% or less for automotive chips specifically.
The global semiconductor shortage dented the supply of passenger cars in 2021 by more than 2 million, or the equivalent of around 10% of the Chinese market, according to British research company LMC Automotive.
Automakers are eager to curb such risks by developing chips in-house. There have also been some industrywide efforts to foster highly competitive chipmakers.
SAIC Motor, Guangzhou Automobile Group and other leading Chinese players have invested in Beijing-based Horizon Robotics, local media report, likely in hopes of turning the artificial intelligence processor maker into a comprehensive supplier for the auto industry.
But challenges remain. Despite an accelerating push into chip development, Chinese automakers still rely heavily on contract manufacturers outside the mainland to actually produce the chips.
Semiconductor Manufacturing International Corp, China’s leading contract chipmaker, is currently expanding its capacity in response to the global chip shortage. But SMIC has little extra room to devote to the auto industry.
The company is also unable to import manufacturing equipment capable of processes 10-nm and under due to US sanctions, and some Chinese media report Geely will contract out the production of its 7-nm chips for Dragonhawk 1 to Taiwan Semiconductor Manufacturing Co instead.
“Commercialising self-driving and other cutting-edge technologies requires cutting-edge chips,” a Chinese auto executive said. “China’s ability to develop chips has grown dramatically, but we are behind when it comes to production capabilities, including equipment.”