How the Rise in Electric Vehicles Impacts the Semiconductor Industry

How the Rise in Electric Vehicles Impacts the Semiconductor Industry

Today about 7.2 million electric vehicles are on the world’s roads. Why is that? Let’s take a look at the US for example: tighter regulations on CO2 emissions, government incentives, and regulatory policies play a huge role in consumer demands and production of electric vehicles. Another factor that contributes to the growing number of electric vehicles on the road is better battery life—enabling drivers to travel longer distances. The ability to travel further makes these cars significantly more appealing to the general public.

Increased Use of Semiconductors: a Catch-22

Here’s the catch-22 in this scenario: advancements in semiconductor chemistry have allowed electric vehicle batteries to function at higher voltages, allowing electric cars to drive further distances before needing a charge, which drives the demand for more vehicles. The surge in demand for electric vehicles then increases the demand for more—and more efficient—semiconductors.

Semiconductors are the heartbeat of electric vehicles. They determine the performance of the whole electric system. In fact, the aggregate value of semiconductors used in an electric vehicle is more than twice that of an internal combustion engine.

In order for electric vehicles to get better mileage, or become cleaner, safer and smarter, semiconductor technology needs to improve right along with them. And, the more sophisticated the electric car, the more semiconductors it will require.

Evolution of Semiconductors

Along with longer battery life, semiconductor innovation has helped drop the costs of electric vehicles. Both of the newer semiconductors used—Silicon Carbide (SiC) and Gallium Nitride (GaN) are less expensive than the original Silicon semiconductors (Si).  Electric vehicles first started with Si semiconductors, which had a short battery life and therefore needed to be charged often.

SiC is the newest innovation, which has improved battery life, but is not yet strong enough to be used to create electric buses and semi-trucks. GaN is a semiconductor that has been used in technology such as smart phones and laptops, and will provide the best performance out of your electric vehicle.

Just like with cell phones and computers, technological advancements in electric vehicles take a product that seems unreachable, and turns it into something that is accessible for the masses. 

The Downside: a Global Chip Shortage

Semiconductors are used in so many forms of technology. Can we keep up with the supply? Currently, no. The demand is exceeding the supply of semiconductors.

Semiconductor chips have been in greater demand since the start of the COVID-19 pandemic and suppliers are having a hard time keeping up with that demand. The contribution of more electric vehicles further exacerbates the supply shortage because electric vehicles need so many semiconductors in each vehicle. The silicon used in these chips is limited in supply and takes a long time to create. Making the switch from silicon to GaN technology in the future, would result in greater supply and cheaper production cost.

The semiconductor shortage is a major concern for electric vehicle manufacturers and car manufacturers as a whole. In fact many companies have shut down production as a result.

What To Do About the Shortage

So what do companies need to do to keep production lines moving, despite the shortage? Your best bet would be to do your due diligence to ensure continuity of your supply chain. Work closely with your trusted electronic components distribution partner in creating a proactive plan to help you manage the demand. Communicating your needs with your supplier can help you better prepare for challenges that arise during these times of uncertainty.

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