Munich Rain, storms and darkness are a nightmare for drivers, but they are not a problem for modern radar solutions. Even under adverse conditions, the radars record what is happening around the vehicle. “Radar is the core technology for autonomous driving because it’s so powerful in any weather, at any time of the day,” says Torsten Lehmann, head of the radar business at chip maker NXP.
It will be years before cars are driven autonomously on a large scale. On the other hand, electronic assistants are already catching up. “Customers are ordering more and more radar systems, while at the same time stricter legal requirements ensure that volumes will increase,” Lehmann asserts.
European semiconductor producers particularly benefit from this. Radar is one of the few areas of the chip industry that is not dominated by US and Asian suppliers. In the booming business, Dutch manufacturer NXP is fighting for dominance with Munich-based Dax Infineon Group.
NXP is all major car brands customers
“With our Radar products, we work with every one of the top 20 automakers,” confirms NXP Director Lehmann. That’s not all: “We are gaining market share.” Radar Solutions is one of NXP’s six growth areas, which, according to CEO Kurt Sievers, promise an annual increase in sales of 20 to 25 percent. This benefits Germany as the location for the chips, because the division is located in Hamburg.
According to the latest available figures, chip manufacturers generated nearly $1.5 billion in sales with radar chips in 2021, up about 15 percent from the same year. According to analysts at Yole, NXP has a market share of 44 percent and Infineon 33 percent.
Infineon assumes that manufacturers will offer nearly a quarter of radar systems each year by 2027. After all, electronics play an important role on the path to self-driving. As a general rule, radar is combined with cameras or lidar systems in order to record the environment as fully as possible. Lidar uses lasers to measure distance.
Just Tesla didn’t want to know anything about radar
Only one manufacturer can do without it: Tesla, the electric car pioneer from America. “Tesla is the only one swimming upstream and relying entirely on cameras and software,” says Albert Vass, a chip expert at BCG. “Everyone else is convinced that only the combination of cameras and sensors is safe enough.”
However, the different systems are very expensive. For so-called Level 2 Automated Driving, BCG has calculated the necessary chip costs to be $290 per vehicle. At this level, drivers can take their hands off the wheel at least temporarily.
It becomes more profitable for chip manufacturers in the later stages. In Level 3, the person behind the wheel can temporarily move away from traffic, in Level 5, the vehicle drives completely autonomously. This requires more chips in each case.
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For automakers, this means additional costs: Depending on the industry, a radar chip currently costs about five dollars. For the accompanying microcontrollers, which are small computers for very specific tasks, customers have to estimate the same amount again. NXP assumes that by the middle of the decade there will be five radar sensors in every mid-range vehicle, and ten or more in every luxury sedan.
Infineon wins big order from truck manufacturer
However, the costs have not deterred car buyers yet. “Radar technology has long since found its way into the Golf class,” confirms Burkhard Neurouter, Head of Radar Development at Infineon. This business is resistant to crises, adds Lehmann, director of NXP: “More and more cars with radar are entering the market. This more than makes up for the dents in car production.
Manufacturers are also fueling the business with innovative solutions that are more powerful and require less space. At the beginning of the year, NXP introduced a system aimed at better identifying vulnerable road users, such as pedestrians or cyclists. At the same time, the developers have reduced the size of the electronics, which will make it easier for car designers to install more sensors. The first customer is Denso, the second largest automotive supplier in the world after Bosch.
Technology is more important to professionals than to individuals. At the beginning of February, Infineon announced a major order from a truck manufacturer that wanted to use Level 4 radar chips, that is, for highly automated driving. Order size: a three-digit amount of one million.
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