Semiconductors power everything we do. From the moment your smartphone alarm wakes you until the time the music on your smart speakers puts you to sleep, every single gadget surrounding us in our daily lives has a semiconductor at its core.
This has become especially true in our vehicles. When you utilize basic functions like windshield wipers, power steering, power windows, or automatic seats, you’re engaging a semiconductor. Newer features such as blind-spot detection and parking assistance are 100% electronically controlled — they neither rely on nor involve any moving parts or pieces.
Our cars are becoming more electronic than mechanical, and semiconductors, the building component of what are often called integrated circuits or microchips, lay the foundation for these electronic components to work. Semiconductors are no longer just an organ in the car’s body — they make up the very bloodline of what keeps it going.
For a hundred years, manufacturers in the auto industry sought to outperform one another by making incremental mechanical adjustments, usually to the engine, but this is no longer the case. In 2007, 20% of the cost of a new vehicle came from semiconductors. Today, that number is 40%. By 2030, experts estimate it will be about 45%.
Whether we know it or not, we purchase cars based on their electronics. Entertainment, safety, ease of driving, and even a car’s mechanical power are controlled electronically. As a result, semiconductors have become the primary differentiator between auto manufacturers.
The future of semiconductors
If semiconductor technology is the bloodline of our automobiles, manufacturers are realizing what we already know about human blood: it’s better produced in-house than transfused. Initially, only a few companies were producing semiconductors. Automakers were all sourcing from the same locations, which made it difficult to achieve a competitive advantage. Today these companies are seeking to bring this technology in-house.
Likewise, the original equipment manufacturers (OEMs) could choose to go ‘fabless’ — design chips specifically tailored to their own needs in-house while outsourcing the production to established chipmakers. Just as Amazon’s foray into chip development specific to cloud-based server applications for Amazon Web Services could potentially pave the path for high-performance computing, OEMs can develop semiconductors in-house. Doing so would mean their chips would match their specific industrial needs for more optimized performance and shorter development cycles for feature improvements.
With deeper operational expertise than a service player with pure semiconductor background and a strong relationship with automobile, aerospace, bio-medical, healthcare, railways, and consumer electric industries—all among the biggest consumers of semiconductors—companies like Quest Global have the edge over others. We’re not just familiar with the technology—we’re like a surgeon primed with precision instruments rather than knives and scissors.
From aerospace, communication, healthcare, transportation, consumer electronics, and hospitality to travel and leisure, we need semiconductors everywhere. Global semiconductors sales increased by 23% from the first quarter of 2021 to 2022, with sales touching 1.15 trillion units in 2021. But just three industries—automotive, computation and data storage, and wireless—could drive 70% of that expected growth.
The shift to electric or hybrid electric vehicles will be necessary to meet global CO2 emissions reduction plans and the pressing need to address climate change. Better electronics have now become standard, enabling safer cars and safer drivers.
The future of automotive, and other increasingly automated industries, will depend on the efficiency and rapid performance increases of the semiconductors powering them.
Sudipto Das
Sudipto Das is the Delivery & Competency leader at Quest Global. With 28 years of professional experience in the hi-tech semiconductor industry, Sudipto has expertise in design, management, execution, and operations. He excels in scaling domain-agnostic platforms, building organizations from scratch, and driving significant growth plans. Over the past 12 years, Sudipto has played key roles in creating three startups. In June 2017, he co-founded a company recognized as one of the Top 10 most disruptive startups in the electrical and electronics sector by the ELECRAMA Startup Awards 2018 for its AI-enabled IoT-based Smart Lighting solution. As a provider of IoT and AI-controlled solutions with social, financial, and environmental viability, Sudipto was acknowledged as the founder of one of the "20 Most Promising Electronic Design Service Providers 2018" by SiliconIndia. In 2020, Sudipto led a nationwide initiative to create a distributed hyper-local delivery system, providing groceries and medical aid to over 25,000 people affected by COVID-19. He currently serves on the board of Inbioz, a startup developing "Make-in-India" intelligent wearables that measure clinical-grade body composition metrics.
Frequently Asked Questions
Semiconductors are revolutionizing the automotive industry by serving as the backbone for modern vehicles’ electronics. They control everything from basic functions like power steering and automatic seats to advanced features such as blind-spot detection and parking assistance. This shift has made semiconductors the primary differentiator between auto manufacturers, with their role in vehicles growing from 20% of the cost in 2007 to an expected 45% by 2030. As vehicles become more electronic than mechanical, semiconductors provide the necessary efficiency and performance improvements essential for modern automotive advancements.
Quest Global stands out in the semiconductor industry due to our deep operational expertise across diverse sectors such as automotive, aerospace, and healthcare. Unlike companies focused solely on semiconductors, Quest Global integrates broad industry experience with semiconductor technology, offering precision and tailored solutions. This unique positioning allows Quest Global to provide end-to-end services that enhance product differentiation and ensure compliance with global standards, making us a trusted partner for advanced semiconductor engineering solutions.
The semiconductor industry is expected to see significant growth driven by three main sectors: automotive, computation and data storage, and wireless technologies. These areas are projected to account for 70% of the growth in semiconductor sales. The demand for advanced electronics in vehicles, the need for data processing and storage, and the expansion of wireless communication technologies are all contributing to this growth trajectory. As industries increasingly rely on semiconductors for innovation and competitive advantage, these sectors will play a pivotal role in shaping the future landscape of the semiconductor market.
Manufacturers are increasingly focused on in-house semiconductor production to gain a competitive edge. By designing chips tailored to their specific needs and outsourcing production, known as the ‘fabless’ model, companies can optimize performance and shorten development cycles. This approach mirrors strategies like Amazon’s chip development for AWS, aiming for high-performance computing. The move towards in-house production allows manufacturers to align semiconductor capabilities with their industrial needs, ensuring better integration and performance in their products.
Semiconductors are crucial in advancing the sustainability goals of the automotive industry by enabling the shift to electric and hybrid vehicles. These vehicles are essential for reducing global CO2 emissions and combating climate change. Semiconductors enhance vehicle electronics, leading to safer, more efficient cars that support the transition to environmentally friendly transportation options. As the industry progresses, semiconductors will continue to drive innovations that align automotive advancements with sustainability objectives.
