Economist Writing Every Day

I recently read a statement that there is something like 1400 individual semiconductor chips in a typical modern car.  I wondered, “Can that be correct?”   1400 is a lot of anything.  I have torn apart whole PCs and found only a few dozen chips.

Chips in cars have big economic significance. As called out on a post back in March, COVID shutdowns of semiconductor plants and other factors meant a shortage of critical chips for cars. This has led to extensive shutdowns of car and truck assembly lines in 2021, affecting employment and auto maker profits.  It is estimated that the world lost 11.3 million units of production in 2021 due to the chip shortage, and may lose another 7 million units in 2022.

But back to 1400  chips…I did not find the One True Pronouncement of chips in cars (a promising N Y Times article lay tantalizingly behind a paywall). But I found a number of statements that corroborated that order of magnitude, and also fleshed out the many uses for such chips.

This picture is worth maybe 1400 words:

Source

Here is an even more detailed diagram (sorry, hard to read):

Source

Cars and trucks have something like 100 distinct electronics modules, and each module has multiple chips. Wiring in cars is expensive and vulnerable, so it is better to distribute the information processing rather than run a bunch of wires back to one central processor.

The chip supply situation should sort itself out by 2024, if all goes well. Meanwhile, electronics has become the tail that wags the automotive dog – – electronics have gone from being just 18% of a car’s cost in 2000, to being 40% of its cost in 2020 , and projected to be 45% by 2030: