Covid-19 has had a massive impact on all facets of business and commerce as widespread supply chain disruptions have spread through every industry.
During the pandemic, a global chip shortage began to emerge, largely driven by consumers and businesses purchasing new laptops and servers for remote workers and home-schooling. In 2020, semiconductor sales growth reached 6.5%. But there were other factors. A historic drought in Taiwan affected output at TSMC because water is critical to chip manufacturing. Semiconductor analyst Shane Rau at International Data Corporation (IDC) also points to fires, power outages and the blockage of the Suez Canal.
All this has fueled a microcontroller (MCU) shortage that has hit the automotive industry hard. According to industry consultancy AlixPartners, it cost the sector around $210bn in lost revenue last year. Moreover, manufacturers scaled back orders as car sales decreased at the beginning of the pandemic, but as the industry now begins to ramp back up, the consequences are being keenly felt.
America makes only 10 percent of the chips it uses, according to semiconductor market analyst Mike Orme of GlobalData. US President Joe Biden’s Build Back Better program aims to increase this share partly by investing $52bn in local American chip manufacturing. But that is for the future.
A more immediate consequence is that automotive developers are now often being forced to redesign the electronic control units (ECUs) within their vehicles around alternative MCUs because the originally specified parts can no longer be sourced – or they must find alternative solutions for software design and test.
The trend toward the software-defined vehicle depends on the availability of appropriate systems-on-chips and microcontrollers. Autonomous driving, electrification, and smart mobility services leverage data-driven networks and service-oriented architectures. According to Volkswagen CEO Herbert Deiss, 90 percent of innovation in the auto industry is today based on software, and management consultancy firm Roland Berger forecasts that silicon will comprise 30 per cent of a vehicle’s content by 2030. ECUs are critical here — there are up to 150 in a single car already.
The combination of increased demand for mobile, IT and smart home products (and then the 5G roll-out) with reduced orders from automotive OEMs has created a perfect storm. Chipmakers have focused shorter-term investments on producing MCUs for consumer markets. But as Covid-19 restrictions ease, people are emerging from their homes, going back to work, and consequently demand for new vehicles is returning.
A further factor for automotive is that it now depends on such a broad range of devices that shortages of just one or two parts can disrupt the entire supply chain. This has serious ripple effects for the concept of a software-defined vehicle because ECU software is often tied to a specific part.
With software updates a continuous part of the vehicle feature delivery process, and stringent safety standards that must be satisfied, corners cannot be cut. All the software components in an ECU must be verified before they can be released to production.
ECU developers are thus in a quandary: they need MCUs to design new ECUs and verify their software designs and updates, but they cannot get enough of them. At the same time, updating or switching to an alternative MCU could lead companies to shut down production altogether if a lengthy software redesign is required.
What realistic and effective steps can be taken in mitigation?
Here are three techniques that can be used to address the challenges facing automotive systems development during an acute MCU shortage:
- Digital verification. Test software without hardware using virtual ECUs.
- Switching. Accelerate MCU replacement by using reference platforms and expert engineering services.
- Prevention. Reduce the MCU hardware dependencies within the vehicle software.
More broadly, automotive should explore and adopt new digitalization methodologies. They can do this often by partnering with proven software vendors, such as Siemens, who understand the global MCU shortage. Such partners are dedicated to helping companies mitigate the crisis by shifting left with techniques like those outlined above.
You can learn more about how to apply those three key tools to combat the MCU shortage in this technical paper: How To Reduce the Impact of the Global Microcontroller Shortage on ECU Software Development.