Intel CEO: Chips will make up 20% of car cost by 2030

By Robert Scammell

Intel CEO Pat Gelsinger has predicted that semiconductors will make up 20% of the cost of materials for premium vehicles by 2030 – a fivefold increase from 2019 – as cars become “computers with tyres”.

The US chipmaker said it will also dedicate capacity at its Ireland fabrication plant for automakers to help them move from legacy automotive chips to “advanced nodes”.

It comes amid soaring global demand for semiconductors that has left the automotive sector scrambling for parts, causing assembly lines to be sporadically closed down over the past 10 months.

Intel said it will create a new design team and offer its intellectual property to “support the unique needs” of automotive customers as part of the “Intel Foundry Services Accelerator”. Intel said it was “engaged in discussions” with potential customers in Europe, which includes automotive companies and their suppliers.

In March, Gelsinger announced spinout Intel Foundry Services to manufacture semiconductors designed by other companies as part of a shakeup to address the demand for silicon. It announced deals with Qualcomm and Amazon Web Services in July.

Gelsinger reiterated Intel’s plan to spend up to €80bn on building and running two European semiconductor fabrication plants over the next decade as it ramps up investment to meet global chip demand.

Intel said it will reveal the location of the European chip fabs by the end of the year.

“This new era of sustained demand for semiconductors needs bold, big thinking,” said Gelsinger, speaking at Munich’s IAA auto show on Tuesday. “As CEO of Intel, I have the great privilege to be in a position to marshal the energies of 116,000 employees and a massive chip-design and manufacturing ecosystem, to meet the demand.”

Today’s cars can easily contain more than 100 chips and according to GlobalData Automotive analysts, “modern vehicles are as reliant on computer chips as they are on their engines and chassis”.

The Intel chief predicted that car chips will comprise 12% of premium vehicle material costs by 2025.

Intel first revealed its plan to build chip fabs in Europe in July, with the initial cost expected to be $20bn. Each fab would require at least 1,000 acres of developed infrastructure.

In May Intel announced it would spend $3.5bn to upgrade its chip fab in New Mexico with advanced 3D packaging technologies.