27 February 2020, Bavaria, Regensburg: A Continental employee checks a circuit board for a vehicle control unit in the electronics production department at the Continental plant. (Photo by Armin Weigel/picture alliance via Getty Images)
A new white paper from consulting firm Deloitte on the semiconductor industry puts hard numbers to the cost of semiconductors and electronics in the automotive industry. Any auto enthusiast could have correctly guessed the trend based on the annual list of new tech features showing up in entry-level and flagship offerings. The marquee number is likely still a surprise: as summarized by Car and Driver, the paper notes that as of 2017, electronics systems powered by semiconductor-based chips comprised 40% of the cost of a new car. That was up from 18% in 2000, 20% in 2007, and is projected to reach 45% come 2030. The cost of the base semiconductors that enable the systems was roughly $312 per car in 2013, and is expected to rise to nearly $600 per car by 2022.
The larger component costs come from finer electronic control of basic systems like windshield wipers and OBDII ports, digitized systems like electric power steering and digital instrument clusters, new automotive-specific features like blind-spot detection and automatic emergency braking, and increasing non-specific tech integration like app-based entertainment and cloud data communication. In 2004, practically no cars had blind spot monitoring nor tire pressure sensors. Now, if you want wireless Android Auto in your car, it's only a chip or three away.
Marching toward a future full of autonomous driving and associated neural nets puts more fuel into cost increases, Level 4 autonomy said to require 24 sensors by itself — each sensor requiring a number of chips in order to function and cooperate with every other sensor and the vehicle. The other three "mega trends" driving electronics systems growth and cost are vehicle powertrain electrification, digital connectivity, and advanced security. That latter trend could be considered ironic, as the expanding use of computer chips requires the even greater use of computer chips to protect all the chips in a vehicle. Could there come a day when cars, akin to the F-16 fighter jet, can't be driven without constant computer control of directional systems?
The massive growth in the past 20 years is part of new government regulations and consumer demand, as well as physical capability as chipmakers learned how to fit more semicondutors on a chip. Growth over the next decade is predicted to slow from its hyperactive decades as computer components, now engineered on the nanometer scale, approach the physical limits of technology in relation to costs that an automaker can viably pass on to the consumer.