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What's the next step for "New Infineon" after becoming the NO.1 of automotive semiconductors?
Sep 25,2020 17:28CST
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The content below was translated by Tencent automatically for reference.

SMM: Infineon officially completed its acquisition of Cypress on April 16 this year, becoming the world's largest supplier of automotive semiconductors-Infineon's share in the global automotive semiconductor market reached 13.4% after the acquisition of Cypress. In the past six months, the two companies have been actively promoting the integration of all aspects, and have made phased progress.

At the Infineon media communication meeting a few days ago, Cao Yanfei, senior vice president of Infineon Technology Greater China and head of the Automotive Electronics Division, revealed that at the sales level, the teams of the two companies have been merged into one. Through a common team to communicate with customers, other aspects such as workflow, corporate culture and other aspects of integration are also ongoing. In the follow-up, the two companies will maximize their synergy and promote "New Infineon" to achieve "1: 1 > 2" through continuous efforts in the three major areas of new energy vehicles, self-driving and car comfort configuration.

The "New Infineon" is emerging at an accelerated rate. Where is the "new"?

According to Cao Yanfei, the term "New Infineon" mainly comes from the fact that after Infineon acquired Cypress, both sides are highly complementary in terms of product system and customer service. As a result, Infineon's market potential in the high-speed growth field of automobile has been further expanded and entered a new stage of development.

Previously, Infineon's products in the automotive field were mainly focused on power semiconductors, automotive microcontrollers, sensors and safety solutions. the application fields cover the body, chassis, power system, advanced driving assistance system and safety and other aspects. It has always been Cypress's strengths in the fields of in-vehicle infotainment, human-computer interaction, data storage and so on.

For cockpit electronics such as dashboards and infotainment systems, Cypress has a diverse portfolio of products, including interconnection technology, NOR flash technology, and microcontrollers, each of which is the key to the development of the next generation of smart cars. Take Bluetooth technology as an example. According to market research institute ABI Research, Bluetooth will become the standard wireless technology in 87% of new vehicles produced by 2024. At that time, Bluetooth will have a bright future in keyless entry, infotainment system interconnection with mobile phones, tire pressure monitoring and driver status alarm. Four to six Bluetooth wireless sensors are expected to be used in each car to improve road safety and driving comfort.

After these technologies are incorporated into Infineon, they not only complement existing Infineon products in terms of microcontrollers, further improve the application of "New Infineon" in the field of body electronics, in the field of information instrumentation and touch human-computer interaction, but also help Infineon build a rich portfolio of wireless interconnection products, including Wi-Fi and Bluetooth. In particular, it strengthens Infineon's technical reserves in 2D and 3D dashboards, infotainment systems, human-computer interaction, touch screens and interconnections. There are also areas such as ADAS and self-driving, where the technologies of both sides are also highly complementary. With the leading storage semiconductor technology, New Infineon is able to provide more advanced and complete solutions in related fields.

"for example, in terms of microcontrollers, Cypress has powerful products such as PSoCTM and TraveoTM, which can be used not only in car bodies, but also in instrumentation, infotainment systems, and so on. In terms of memory, Cypress has NOR Flash, SRAM, etc., and in power semiconductors, there is USB Type-C PD. " Referring to Cypress's synergy in specific products, Cao Yanfei pointed out.

"through the complementarity of the above products, Infineon currently has corresponding products for different needs and scenarios in the aspects of body, instrument / entertainment information system, chassis / safety, powertrain, advanced auxiliary driving, self-driving and so on. and can provide customers with one-stop solutions, Infineon has successfully become one of the top 10 semiconductor manufacturers in the world and the world's largest supplier of automotive semiconductors." Not only that, thanks to Cypress's NOR Flash products, New Infineon is currently the world's second-largest supplier of automotive-grade storage semiconductors, with a market share of 13.2%.

In addition to the synergy and complementarity at the product level, the integration with Cypress also gives Infineon a wider range of customer resources and more collaborative sales opportunities.

Infineon predicts that with the acquisition of Cypress, the expected economies of scale will gradually create a cost synergy of 180 million ou yuan per year by 2022. In the long run, in view of the complementary advantages of the two product portfolios, it will provide more chip solutions for the market, and in the long run, the potential revenue synergy is expected to exceed 1.5 billion ou yuan per year.

Focus on the layout of three major areas to achieve "1x 1 > 2"

Although Infineon and Cypress are highly complementary in terms of solutions, many people are concerned about how New Infineon can achieve greater benefits through an orderly product portfolio after the merger of the two companies. In response, Cao Yanfei pointed out that "New Infineon" will focus on three growth areas: new energy vehicles, self-driving and vehicle comfort configuration, in order to cope with the increasing demand for semiconductors in the automotive industry under the background of the "four modernizations".

According to relevant statistics, since 2015, the average semiconductor content of the (ICE) of internal combustion engine vehicles has increased by 23.4%. The current rapid evolution of the electrification trend of powertrain is still injecting new growth momentum into this field, promoting the continuous doubling of the semiconductor content, especially the power semiconductor content in the vehicle. "so we must have corresponding products to match the requirements of products and technology in the electrification process." Cao Yanfei said that Infineon, as the largest automotive power semiconductor manufacturer, has a market share of 25.5%. At present, no matter in IGBT or silicon carbide, there are corresponding products, and in the later stage, new products will be put on the market one after another.

Comparison of semiconductor content in new energy vehicles with different degrees of electrification. Photo source: Infineon.

For example, in terms of IGBT, Infineon is mainly promoting a technology called EDT2, while in the area of silicon carbide, it has 25 years of development experience, and products have been launched one after another in vehicle chargers, main inverters and other application fields. Among them, with the excellent performance of silicon carbide under the conditions of high temperature, high voltage and high frequency, Infineon applies silicon carbide technology to the main inverter. based on the 800 volt system, it has been able to improve the range by more than 7%. And has been recognized by the main car factory. "on this basis, Infineon will continue to invest and innovate in the field of silicon carbide. We predict that the market share of silicon carbide may be more than 20% by around 2025. This means that for some time in the future, silicon will still be the main material for power semiconductor devices. "

It is worth mentioning that in 2019, in the world's best-selling BEV and PHEV, 15 models have adopted Infineon power devices in the electric power transmission system. From 2020 to 2021, 35 new BEV and PHEV models using Infineon products will be mass produced.

Autopilot, as another area with equally huge demand for semiconductors, is also the focus of Infineon's layout at this stage. According to Cao Yanfei, for different levels of self-driving requirements of L0-L5, Infineon has very comprehensive and powerful devices and solutions in perception, analysis, decision-making and execution, including sensors, processors, MCU chips for vehicle control, as well as end-to-end reliable actuators and actuator drivers. In terms of millimeter wave radar sensors, Infineon is the world's largest supplier of automotive 77GHz radar chips. Infineon has corresponding solutions in the field of camera sensors and lidar.

"in the next five years or more, with the continuous improvement of the level of self-driving, more sensor modules such as cameras and lidars are needed, which will continue to promote the further substantial increase in the content of semiconductors and the cost of BoM in the car, and the growth potential in this field will still be huge." Cao Yanfei said. To this end, Infineon is carrying out related technology reserves, such as developing the next generation 77GHz radar based on 28nm technology, exploring the point cloud imaging technology of millimeter wave radar, etc., in order to better meet the accurate environmental perception needs of self-driving cars.

There is also comfort and luxury, based on the continuous improvement of user demand, to further promote the innovation and growth of semiconductors in traditional market segments, which is also the focus of Infineon. For example, applications such as memory seats, seat heating, lifting doors and adaptive headlights are gradually becoming an important way for vehicle manufacturers to improve their selling points and consumer satisfaction. "in the future, this field will also have greater market potential, and even continue to tap new demand or potential to drive cars towards a more personalized, comfortable and even luxurious direction. Semiconductors will play an important role in it. For example, the compound annual growth rate of adaptive headlight semiconductors in the next five years is expected to be as high as 35%. Then Infineon, as the world's largest supplier of automotive semiconductors, will certainly benefit. "

In fact, the market benefits that the above major technological trends bring to Infineon have begun to appear. Affected by the epidemic in the first half of this year, although there was a large decline in production and sales in the global automobile market, driven by the "four modernizations," the content of semiconductors in the car continued to increase, thus leading to the rapid recovery of Infineon's automotive business. "in the future, I believe that the semiconductor market will continue to maintain this upward trend." Therefore, although Infineon has made great adjustments to its overall structure this year, Cao Yanfei pointed out that the overall strategic focus of Infineon in the automotive field will not change with it, but will continue to focus on the above three core points, as well as in the Chinese market.

"Infineon attaches great importance to the development of China's local market, and we provide a full range of services to the Chinese market from all angles, including engineering applications, local production, supply chain support and the establishment of the biosphere. In the future, we will rely on the integration with Cypress to further explore some synergy between the two companies in serving customers and building product solutions to better serve Chinese customers." Talking about the strategic focus of Infineon in the global and Chinese markets after the merger of the two companies, Cao Yanfei pointed out that the final realization of "1: 1 > 2".

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