According to the Nikkei News, citing a number of people familiar with the matter, Chinese car companies are comprehensively promoting the process of domestic substitution of automotive chips. Major automakers such as SAIC, Changan Automobile, Great Wall Motor, BYD, Li Auto, and Geely are actively preparing to launch mass-produced models equipped with domestically produced chips by 2026. Among them, at least two brands plan to achieve large-scale production of related models in 2026.
Nikkei reported that the latest policy goal is to achieve 100% localization of automotive chips by 2027, which is significantly earlier than the phased goal of "25% of car companies using domestic chips" proposed at the beginning of the year, releasing a strong policy guidance signal. Although this target is not a mandatory target, as a strategic framework at the national level, it will encourage enterprises to accelerate the synergy with the national will and form a closer industrial linkage.
In line with this strategy, some car companies have begun to carry out in-depth layout. For example, GAC Group is working closely with local fabs such as SMIC and CanSemi to jointly evaluate the full-process feasibility of domestic chips in automotive-grade applications, and accelerate the verification and substitution process of local chips.
In addition, mainstream OEMs, including SAIC, Changan, BYD, Geely, Great Wall, GAC and FAW Group, have been encouraged to accelerate the introduction of domestic chips at the policy level. It is worth noting that most automotive chips themselves do not have high requirements for the manufacturing process and can rely on mature processes for production, which also provides a realistic and feasible breakthrough for China in the field of semiconductor "shortcomings".
Figure: Domestic car companies sprint to the goal of full localization of automotive chips in 2027
Despite this, Chinese automakers are still highly dependent on U.S. and other overseas chip suppliers for high-end applications such as intelligent driving. Nikkei pointed out that the general consensus in the industry is that it still takes a long transition period to achieve complete domestic substitution of chips, and it is difficult to achieve it overnight in the short term. At the same time, global semiconductor manufacturers such as STMicroelectronics, NXP, and Infineon are also strengthening cooperation with Chinese fabs to expand local production capacity and meet the growing demand for chips in the Chinese market.
New power car companies deploy high-end chips, and self-developed AI chips challenge NVIDIA
In the field of new energy vehicles, the upsurge of self-research of domestic chips is intensifying. According to reports by the Financial Times and SeekingAlpha, Xpeng Motors, a new force in car manufacturing, has joined the chip development camp and developed high-performance chips for intelligent driving for its partner Volkswagen. It is said that Xpeng's self-designed "Turing chip" has completed tape-out verification, focusing on AI computing capabilities, and its performance level is claimed to surpass NVIDIA, which is one of the core components of its next-generation smart car technology.
In July 2023, Volkswagen spent $700 million to acquire a 4.99% stake in Xpeng, and the two parties formed a strategic alliance to jointly develop a next-generation electric vehicle platform suitable for the Chinese market, which also provides substantial support for the landing of domestic AI chips in the vehicle end.
From policy guidance to industrial collaboration, from traditional car companies to new forces of smart electric vehicles, the wave of localization of China's automotive chips is accelerating in an all-round way. In the context of the deep reconstruction of the global chip pattern, this "core war" is not only the only way for technological independence, but also a key battle for China's auto industry to move towards a new stage of high-quality development.
