(Yicai Global) April 20 -- Chinese auto manufacturers are becoming more selective in selecting chips as the price of new energy vehicles slides, squeezing their budgets, Yicai Global learned from interviews with several automotive chip manufacturers at the ongoing Shanghai Auto Show.

A price war in China’s auto industry has led carmakers to favor lower cost and more cost-effective solutions when selecting chips for their vehicles.

“We face pressures from all sides, including pressure on the entire supply chain and that on costs,” Chen Liming, president of automotive semiconductor manufacturer Horizon Robotics Technology, told Yicai Global. “As a result, we have noticed that the whole market has become more conservative and returned to business essentials.”

One of Horizon’s chips has the dual function of being able to support both the front-view smart cameras and pre-controllers for parking and this is becoming more popular among car manufacturers, said Vice President Zhang Yufeng, who is also president of the company’s smart car business division.

E-mapping firm NavInfo released a lightweight map for intelligent driving at the Shanghai Auto Show which works well with a little chip with small computing power.

The Netherlands’ NXP Semiconductors provides reusable solutions for every car model, rather than developing a separate solution for each vehicle and this cuts costs greatly, said Executive Vice President Jens Hinrichsen.

“The traditional division of labor is that chipmakers sell their products to first-tier suppliers, who make the products into electronic control units based on the needs of vehicle manufacturers which are then delivered to the carmakers for final assembly,” said Zhai Xiaoshu, marketing director of the automotive electronics business unit at Eindhoven-based NXP’s China arm.

“The entire automotive electronics industry will have to change a lot in the future. The linear supply chain will gradually become more diversified, with vehicle manufacturers at the core surrounded by upstream suppliers and software service providers, who will provide collaborative services based on the new architecture of carmakers,” Zhai added.

Editor: Kim Taylor