Chip Startups are Gaining Traction in Auto Industry

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The ecosystem disruptions wrought by ADAS and AV development have made the automotive-semiconductor market more hospitable to startups...

www.eetasia.com, Dec. 24, 2020 – 

The ecosystem disruptions wrought by ADAS and AV development have made the automotive-semiconductor market more hospitable to startups. This four-part series explores the contextual drivers of the recent increase in startup activity, the challenges these new players will face as they build their businesses, strategies for success, and the potential impact of the Covid-19 pandemic on the startup trend going forward.

Technology-driven megatrends in the automotive industry are disrupting the semiconductor ecosystem. Breakthrough innovations in energy systems, connectivity solutions, and advanced driver assistance and autonomous driving systems are creating new opportunities – and new competitive pressures – for semiconductor solution providers that are changing the competitive landscape as never before in the history of the automotive-semiconductor industry.

In response to these new opportunities and competitive pressures, business forces have also been changing the landscape. These business forces can roughly be categorized into three main areas:

(a) consolidation through mergers and acquisitions;

(b) entrance of chip vendors from other market segments like mobile or computing; and

(c) the emergence of entirely new startup companies that are better able to address specific market and technology niches left open by the established semiconductor players.

The automotive-semiconductor M&A wheel of fortune continues to spin with varying outcomes. Qualcomm's acquisition of market leader NXP, which would have been a game changer for the automotive industry, ended up falling apart. Renesas, currently the No. 3 automotive-semiconductor player, announced its acquisition of IDT, a strong player in the analog/mixed-signal domain. The IDT acquisition came less than 18 months after Renesas acquired Intersil, putting the Japanese semiconductor giant on a path to threaten NXP and Infineon in the automotive market. In turn, in 2019 Infineon acquired Cypress Semiconductor, which also has a broad automotive offering.

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