More efforts are needed to bolster the development of the auto chip industry in mainland China as semiconductors become essential for increasingly electric, connected and intelligent vehicles, experts said on Friday.

Dong Yang, co-chairman of the China Automotive Chip Industry Innovation Strategic Alliance, an organization dedicated to promoting the development of the local automotive semiconductor industry, said, “Currently, we are heavily dependent on the import of crucial automotive chips. Although the Chinese mainland accounts for more than 30% of global car sales, local companies only produce about 5% of global automotive chips. »

According to him, it is important to cultivate competitive local automotive chip companies that can help automakers better cope with chip supply challenges and possible export restrictions imposed by other countries in a geopolitical uncertainties.

This week, South Korean online news publisher Business Korea quoted unnamed sources as saying that the US government had offered to create a semiconductor industry alliance with its allies, including South Korea and the Japan, to keep the nascent semiconductor industry on the Chinese mainland at bay.

Dong said, “We are striving to get a healthier proportion of local chip production so that we can rely on ourselves in an emergency. Meanwhile, we will continue to expand international cooperation, since chips and cars are both highly globalized industries.

Miao Wei, a former industry and information technology minister, also told a conference last week that the auto industry in mainland China lacked “chips and souls,” or chips and critical operating systems, especially in vehicle regulatory level components.

Vehicle regulations are requirements that automobiles must meet in order to be approved for sale or use in a particular country or region.

“In the past, automakers basically ignored the production of chips and (the research and development of) operating systems and left them to suppliers. While our automakers were doing little, foreign automakers began to invest in Taiwan Semiconductor Manufacturing Company, a major chipmaker, for more production capacity,” he said.

Miao also said that the auto industry in mainland China has gained momentum in the first half of the “game”, or in the development of new energy vehicles, but the winning hand still lies in the second half of the game. , which is the development of intelligent connected vehicles.

“We are confident and able to do well in the second half of the game, as long as more efforts can be made to give full play to our advantages in institutional systems and mechanisms, market potential, as well as IT technologies. information and communication,” he said.

Roy Lu, an independent automotive analyst based in Shanghai, said local automakers have shown a lot of interest in the latest smart vehicle chips, but have little involvement in producing the better-known microcontroller units. as MCUs, which support automotive applications from engine control. infotainment systems and body control.

He explained that MCUs are less cost effective and the need for them will become smaller as vehicles become computers on wheels.

“But automakers cannot get enough chips by pressuring auto-parts makers alone. They should at least invest together to increase their capacity. Such investment is necessary at the moment,” Lu said.

Some major Chinese automakers have already started efforts in this direction. Gan Jiayue, CEO of Geely Auto, said the company is optimizing its supply chain by strengthening cooperation with chipmakers.

“In fact, we’ve now established dialogues with over 130 chipmakers, and we’re buying some chips directly from them,” Gan said.