China's Automotive Chips
China's chip industry achieved key milestones.
China's Automotive-Grade Chips Break Through on Multiple Fronts
In late May 2026, multiple media outlets reported on China's multi-pronged breakthroughs in automotive-grade semiconductors. From MCUs to power devices, from sensors to advanced process nodes, domestic automotive chips are accelerating from "functional" to "competitive." This progress rides on two tailwinds: the global auto chip shortage's window for domestic substitution, and sustained demand from China's expanding NEV market.
Three Breakthrough Directions
- Automotive MCUs: Nuvoton's M2A23 series achieved AEC-Q100 Grade 1 certification (-40°C to +125°C), signaling domestic automotive MCUs entering core domains like powertrain and chassis control. Xiaohua Semiconductor partnered with Puhua Basic Software to build an AUTOSAR ecosystem, addressing the software gap in domestic auto MCUs
- Power semiconductors: BYD Semiconductor's in-house SiC modules are deployed in the Yangwang U8; CRRC Times Electric's IGBT modules have entered multiple JV automaker supply chains. Per Yole, China's share of the global EV power semiconductor market has risen from 15% in 2020 to 35% in 2025
- Advanced-node chips: reports highlighted that a leading domestic foundry achieved key progress on a 7nm automotive-grade process, with a high-performance SoC for intelligent driving domain controllers nearing tape-out—the first time domestic automotive chips have reached the 7nm node
The Unique Bar for Automotive Chips
Unlike consumer-grade chips, automotive chips must clear three certification hurdles:
- AEC-Q100 qualification: covering temperature, humidity, vibration, and ESD reliability testing, with Grade 0 (-40°C to +150°C) as the highest tier
- ISO 26262 functional safety: spanning ASIL A through ASIL D, involving systematic development processes and redundancy design
- IATF 16949 quality management: automotive-specific quality management certification emphasizing defect prevention and continuous improvement
The stacking of these three certifications extends automotive chip development cycles to 3-5 years—two to three times that of consumer chips. This is why the global automotive MCU market has long been over 80% controlled by five players: Renesas, NXP, Infineon, TI, and Microchip.
How Long Will the Substitution Window Last?
The 2020-2022 global chip shortage cracked open a door for domestic automotive chips—OEMs, driven by supply-chain security, proactively opened second- and third-source qualifications. But with international incumbents restoring capacity after 2023, the window is narrowing. Domestic automotive chips need to seize the remaining 2-3 year strategic window to make the leap from pin-to-pin replacement to defining new requirements.
Another highlight from the reports is the penetration of RISC-V architecture into automotive. The China Automotive Chip Alliance has formally established a RISC-V Automotive Chip Committee, co-initiated by five major automakers, with the goal of building an autonomous automotive instruction-set ecosystem independent of Arm.
HSY Perspective
Both Nuvoton and Xiaohua Semiconductor—represented by HSY—have made substantive progress in automotive MCUs. For HSY's automotive electronics customers, the maturation of domestic automotive MCUs means shorter lead times, more flexible customization support, and more competitive cost structures. We recommend tracking the Nuvoton M2A23 series' mass-production validation progress in body control and sensor-node applications, as well as Xiaohua Semiconductor's AUTOSAR ecosystem integration—both will directly influence Tier-1 supplier sourcing decisions.
Source: compiled from multiple Sina Finance industry reports, May 30, 2026