China's pivotal role in automotive semiconductor innovation

Yole Group launched its first automotive White Paper, Vol. 1 — Part of the 2025 White Paper Collection. The automotive industry is undergoing a profound transformation. At the heart of it all? Semiconductors. 

With this first automotive White Paper, Yole Group examines the current state of the industry, highlighting key innovations, challenges, and breakthroughs while exploring future developments. Leveraging their deep expertise in market trends and technology, analysts provide insights into the evolving automotive landscape and the next generation of vehicles. 

The automotive industry is experiencing its most transformative era since its inception. From electric cars to autonomous shuttles, high-speed trains to aircraft, mobility is being redefined — and semiconductors are at its core.

Pierrick Boulay, Principal Analyst, Automotive Semiconductors at Yole Group, explains: “At Yole Group, we closely monitor these shifts, focusing on how semiconductor technologies enable new mobility functions. ADAS and electrification are becoming standard, laying the groundwork for fully autonomous & electric vehicles.”

Yu Yang, Principal Analyst, Automotive Semiconductors at Yole Group: “In the ongoing revolution, China plays a pivotal role. As a hub of innovation and manufacturing, the Chinese ecosystem is fueling both technological breakthroughs and market acceleration on a global scale, while also fostering the rise of its own automotive giants at all stages of the supply chain.”

In the face of this abrupt change, how are European and North American OEMs positioning themselves to remain competitive? What will the ripple effects be on the global semiconductor supply chain? How will standards be (re-)defined? And as vehicles become ever more connected and autonomous, how can the industry ensure data security and privacy across such a complex, international landscape?

A key strategic question is related to semiconductor device makers: the Chinese car OEMs have a supply strategy to increase, car model by car model, Chinese sourcing of semiconductor devices. So, they are replacing their existing global suppliers, including Infineon Technologies, NXP, STMicroelectronics, TI, Renesas, and onsemi… to name just the largest ones, with Chinese companies.

This is a dramatic shift for the non-Chinese IDMs. Some, like STMicroelectronics, are building a dedicated strategy to become Chinese in China. However, a similar strategy is clearly needed for each one of these companies.