Gasoline Engine or Battery Power: What Semiconductors Will Be Needed?

Gasoline or electric?  Hybrid or plug-in.  Lithium ion or fuel cell?  What will we be driving?  It depends on the supply of oil, the price of gasoline, global warming, battery technology and more; but, whatever the outcome, there’s opportunity for semiconductors. 

Automobile sales are beginning a recovery from a disastrous slump.  Sales will increase more than 3% annually through 2013.  That may not seem very high, but it is a terrific number in the automobile industry, especially after the last year.  It will lead to much higher semiconductor growth opportunities.  For example, the 2008 - 2013 CAGR for hybrid electric vehicle control semiconductor revenue will be 52.8%. 

Semiconductor growth opportunities will occur, in part, because the kinds of automobiles being manufactured are going to change dramatically.  Cars will be smaller, more fuel efficient, and have alternate power plants.  The facts supporting this have become politicized and are hotly disputed; but here are the basics. 

Oil supplies are being depleted.  The price of gasoline will increase to $10.00 per gallon or more in the US within ten years.  Global warming is real; and people are causing it, not some variation in a natural cycle.  Automotive emissions are a major contributing factor. 

Reducing gasoline consumption is a necessity.  Battery-powered vehicles are a promising solution, but increasing gasoline engine fuel economy can be accomplished sooner than battery-powered vehicles can be fully developed.  The necessary technology is well understood, and the engineering costs are less than the engineering costs for improving battery powered vehicles.  It does require life style changes:  smaller cars, smaller engines and less travel for example. 

There are some significant technical and economic problems to overcome before battery-powered vehicles can become the dominant means of transportation. 

• Battery-powered cars are more expensive than gasoline-powered cars, and the time required for reduced fuel costs to equal the added cost is too long. 
• Today’s batteries are too expensive, too heavy, do not provide enough range and use raw materials that are potential environmental hazards or may be in short supply. 
• The infrastructure and generating capacity required for charging battery-powered vehicles, either at home or on the road, is inadequate or nonexistent. 
• Increasing the number of coal-fired electrical plants to provide added generating capacity for battery-powered vehicles may have severe environmental impacts. 

These problems may eventually be solved, but battery-powered cars will be less than 10% of total car sales by 2013.  Further improvements in gasoline engine efficiency will be necessary, and semiconductors will be needed to accomplish those improvements. 

Gasoline engine efficiency has improved through better fuel injection and ignition timing control and can get even better by technologies such as gasoline direct injection; dual clutch transmissions and electrically powered auxiliaries.  Together these can improve gasoline mileage by 15% to 25%.  The thing that these technologies have in common is semiconductor control.  Freescale is already offering a multifunctional ingnition and injector driver for one and two cylinder engines. 

The efficiency of battery powered cars can be improved by better control of the transition between gasoline and electrical power, in hybrid electric vehicles, and by using more efficient power semiconductors in either hybrid electric or plug-in electric vehicles.  Again, semiconductors are the common thread.

There will be numerous automotive semiconductor growth opportunities in the coming years.  The CAGR (Compound Annual Growth Rate) for unit sales of hybrid electric vehicles will exceed 30% from 2008 through 2013.  During the same time period semiconductor revenue associated with the control systems in hybrid vehicles will increase from $58 million to $179 million, a CAGR of more than 25%.  This is well above the overall semiconductor revenue CAGR.  But growth is not  limited to powertrain or control system semiconductors.   There will be growth opportunities in infotainment, in multiplexing, in body electronics and in other areas.  Semico’s automotive studies identify and quantify these opportunities. 

Morry Marshall
VP Strategic Technologies