Decarbonization and Digitalization: Semiconductors at the Heart of Electric Vehicle Innovation

Infineon recently held its annual OktoberTech Asia Pacific 2022 in Singapore. The key theme of the event focused on decarbonization and digitalization. During the event, the company had two key announcements, one of which was its collaboration with VinFast, a relatively young EV company, backed by one of Vietnam’s largest conglomerates, VinGroup. The collaboration will see the establishment of VinFast-Infineon Competence Center in Hanoi, Vietnam. VinFast is notably Vietnam’s first domestic EV vendor manufacturing in Vietnam. This collaboration seeks to accelerate the development of future smart mobility solutions such as electric drive train.

Earlier this month, Infineon also joined the EEBus Initiative to support standardization work for energy management systems. EEBus promotes the standardization of interfaces such that power generators and end user devices could establish a common communication. Standardization is crucial for EVs and the whole electrification process in order for industries and societies to tackle climate challenge. Infineon is also the first semiconductor company to join the initiative. One of the key goals of the initiative is to create a unified and open communication solution that enables bidirectional charging and a decentralized power grid.

The electrification of vehicles is one of the more promising approaches for the automotive industry to tackle their carbon emissions challenge. Based on International Energy Agency (IEA) data from 2021, the transport industry contributes for about 37% of CO2 emissions (7.7 Gigatons) from end‐use sectors, of which, the road segment makes up approximately 73.7% of the carbon emissions within the transport industry, or 5.86 giga tons. While there are potential alternatives such as hydrogen to electric, the former would still require time before it might take central stage next to the EVs today. Technically, hydrogen car is also an electric car as it uses electric motor, just instead of battery it uses a hydrogen fuel cell. There are other reasons why EVs are picking up faster than hydrogen, including the charging infrastructure availability, alternative electricity generation capabilities, and the presence EV vendors such as Tesla, BYD, and Hyundai, among others. Certainly, there are synergies within the design and architecture of EVs with next-generation infotainment systems and autonomous driving, as detailed in ABI Research’s recent insight on why EVs are at the forefront of vehicle technology (IN-6570).

With electrification, electromobility needs the assistance of semiconductors for the EV to work. One of the key parts for electric cars is its electric drive train, a key focus for Infineon. To ensure the goal of cutting carbon emissions is achieved, it is necessary for components to be optimized and overall performance maximized. For example, the energy for EV and its drivetrain derives from the lithium-ion battery systems. The management of the battery’s health needs to be done properly to protect the battery and ensure its performance. Another important part fulfilled by the semiconductors is in the traction inverter. The inverter is the part which converts the DC power to AC power through Pulse Width Modulation (PWM). AC powered electric motors operate more smoothly than DC powered motors. The inverter therefore needs to ensure minimal loss and provides maximal thermal efficiency to optimize the performance of the motor. It is also crucial in regenerative braking and feeding the energy back into battery. Semiconductors, such as microcontrollers and other integrated chipsets, are critical to ensure the workings.

According to ABI Research, in 2022, EVs make up less than 10% of the total sales volume globally but show an enormous growth from just three years ago. For EVs to take flight and help tackle global emission challenges, it is not only the vehicle which requires the industries and governments’ attention; the charging infrastructure which enables consumers to make the switch over to EVs is equally critical. For EVs to replace the role of Internal Combustion Engine (ICE) vehicles in people’s mind, it must be as easy to use as ICEs. While the range of EVs has improved over the years, it continues to be a perennial concern as there are locations where you can pump gas for ICEs but not charge your EVs. Public infrastructure would play an important part of the equation to extend DC fast charging to EVs and ensure a journey can be completed without worries.

Another area which to take note of is the transformation of the energy ecosystem where EVs can play a role. A recent ABI Research insight on (IN-6043) highlights the current challenges and trend of Vehicle-to-Grid (V2G) in the industry, elaborating on why commercial fleets are more popular compared to EVs for V2G. V2G aims to ensure load balancing and the energy requirement coming from widespread EV adoption would not overwhelm existing energy infrastructure. Upgrading of energy infrastructure can be done but it will take a long time. An alternative to meeting load balancing is via connect intelligence within EVs to shift charging loads towards non-peak hours. At the same time, EVs also support the energy consumption of everyday consumers. This comes in the form of bidirectional charging which EVs could support such as to the homes (V2H) or for appliances (V2L). This is one of the reasons why Infineon joined the EEBus Initiative to help drive standardization of communication between the power generator and the end user devices or equipment (e.g., EV). This will help enable the communication and management of the entire energy ecosystem, where EVs are part of as EEBus gain even greater traction.

Based on ABI Research’s Vehicle and Mobility Services Market Data (MD-MOBI-107), the annual global  sales volume per EV is expected to reach approximately 25 million units by 2030, growing at a Compound Annual Growth Rate (CAGR) of about 15% from 2022 to 2030. Asia Pacific will make up more than 50% of the total sales volume. This is to be expected given the number of EV companies, the population, and the size of the Asia Pacific region. Infineon certainly is not alone in this. Semiconductors such as NXP and Renesas both have announced their respective signings with EV makers in the Asia Pacific region. For example, Renesas is working with BYD and supplying the maker with microcontrollers and other related chip solutions.

For these semiconductor companies, the EV trend is the answer to tackling the greenhouse gas emissions issue. The future looks bright not only for the globe but also for semiconductor companies. Infineon has said that an EV car has almost double the number of chipsets embedded within compared to a traditional ICE vehicle. This means two things: one, the number of chipsets that will be in demand will only increase making it good news for the semiconductor companies, and two, chipsets will become increasingly important in its role to optimize the operations and therefore the energy usage in EVs.