An automotive semiconductor is a key electronic component deployed in vehicles to control the functioning of various parts, including ADAS, safety systems, power and battery systems, and more. In recent times, EVs and LEVs have observed significant advancements, allowing semiconductors to modernize the vehicles, by enabling fuel efficiency and optimizing battery consumption.
Electric vehicles are largely dependent on semiconductors, which are essential for their proper functioning, such as battery efficiency, charging, and power management. Moreover, governments across the globe are focusing on increasing the adoption of EVs, which has led to rise in demand for semiconductors. In addition, the growing focus of key player’s on strategic partnerships and collaborations is leading to advancements and innovations in the automotive industry, further driving the demand for semiconductors on a large scale.
Shift in electrification and AI trends shaping the future
Electric vehicles and ADAS systems have brought about a major revolution in automotive semiconductors. Similarly, battery electric vehicles (BEVs) require substantial amount of discrete-power and analog chips, which has increased the demand for semiconductors globally. For instance, STMicroelectronics (ST) is largely concentrating on investments strategy and is focused on next-generation semiconductors, including SiC and GaN, which are crucial in the manufacturing of EVs. For instance, STMicroelectronics (ST) is largely concentrating on investments strategy and is focused on next-generation semiconductors, including SiC and GaN, which are crucial in the manufacturing of EVs. These devices help improve EV range and efficiency by operating at higher temperatures and allow higher switching speeds. For instance, STMicroelectronics (ST) is largely concentrating on investments strategy and is focused on next-generation semiconductors, including SiC and GaN, which are crucial in the manufacturing of EVs. SiC devices help improve EV range and efficiency by operating at higher temperatures and allow higher switching speeds, whereas GaN systems are ideal for high-frequency applications, LED lighting, and fast charging in EVs.
Moreover, many companies in the sector are adopting strategic partnerships and collaborations to gain profit owing to rise in demand for EVs and autonomous driving technologies. Moreover, rise in trend of AI is allowing top companies, including NVIDIA, Qualcomm, Intel, and more to manufacture automotive-grade AI chipsets.
Significant impact of regional and geopolitical dynamics on the industry
The automotive semiconductor market is being dominated by the Asia-Pacific region, owing to rapid growth in chip manufacturing in countries such as China, Taiwan, and South Korea. According to Allied Market Research, the sector is projected to rise at a CAGR of 10.1% from 2023 to 2032. EV boom in the region and China’s dominance towards manufacturing domestic chip are major factors driving the regional growth in the field. Moreover, China, which is a hub of innovation and manufacturing, is leading in innovation and fostering rise in presence of automotive companies in the country. For instance, many of China’s automakers are manufacturing in-house semiconductors, in order to reduce their reliance of importing from foreign manufacturers. Companies, including BYD and Geely are transforming the technology system in the country, developing their own automotive semiconductors.
Similarly, India’s leading initiatives in the industry, such as “India Semiconductor Mission” and “PLI Scheme” promote self-sufficiency owing to in-house domestic chip design and manufacturing. Although, there is lack of infrastructure and skilled labor in the country, India is emphasizing on fostering innovation, raising awareness, and adopting strategies such as partnerships, to strategically position itself in the industry.
Infenion Technologies joins hands with India’s Ather Energy
Currently, India is witnessing surge in adoption of electric two-wheelers, and is one of the fastest-growing EV sectors globally. On May 22, 2025, Ather Energy, which is a leading manufacturer of LEVs has partnered with Infineon Technologies, to drive innovation and advancement of semiconductor technologies in India. Both companies signed a MoU in Seoul, South Korea, with a shared to vision to drive growth in India’s EV sector. Infineon’s expertise and leadership in semiconductors and systems will provide Ather to better their EVs, making them more accessible convenient, reliable, and sustainable. Key objectives of the partnership between Ather and Infineon include development of EV infrastructure in India, owing to rise in EV adoption in India. The collaboration further aims to take advantage of Infineon’s innovative and advanced semiconductor solutions. Government initiatives in India are currently focused on sustainability, and thus this partnership between Ather Energy and Infineon Technologies aligns with India’s goal of achieving 30% EV sales by the year 2030.
Future Outlook
The EV sector is expected to witness growth in the years to come, thus, necessitating advanced automotive power semiconductors. Rapid technological advancements in EVs and BEVs and adoption of 5G chipsets are expected to drive the industry in the forecast period. With major companies focusing on various strategies to innovate and develop semiconductors, the industry is anticipated to support their initiatives and drive growth in the coming years.
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