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How Drones and Self-Driving Cars are Changing the Semiconductor Industry

Posted on October 6, 2017 by Jack Trompert

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After years of smartphone and PC domination, many are pointing to Unmanned Autonomous Vehicles (UAVs) as tech’s next big thing. The demand for this cutting edge technology is increasing, and UAV tech is pushing the industry forward by requiring more from semiconductors than ever before.

A few of the world’s largest companies are already involved in this new sector and countless startups have emerged to improve upon autonomous vehicle solutions. Google has spent over $1 billion dollars on Waymo, their driverless car project. Amazon has already employed drones into their logistics systems.

Though UAV technology is still in its infancy, it’s undeniable that this new movement will have profound effects on a variety of industries. One of the biggest impacts will be in the semiconductor industry—where slowing cell phone sales and a global fascination with Artificial Intelligence are causing manufacturers to branch out and refocus on the seemingly limitless applications this new avenue of technology could provide.

In this article, we’ll look at how the automotive and drone industries are pushing semiconductor growth and innovation with their increasing demands.

Semiconductors and Self-Driving Cars

In general, the automotive industry is becoming more electric, and self-driving cars have been getting the most attention lately as they hold the biggest potential for change on a global scale. Autonomous personal vehicles could save personal time, limit car accidents (which account for 1.2 million deaths per year), improve traffic, allow easier travel for the handicapped, and more. As semiconductors are the building blocks of modern electronics, the industry is experiencing a boost in demand.

Automotive semiconductor revenue is growing twice as quickly as the overall semiconductor market. At Imec Technology Forum 2016, Audi executive Berthold Hellenthal noted that 80% of all automotive innovations depend on semiconductors. PwC estimates that electronic components (which currently constitute 30% of a vehicle’s manufacturing cost) will represent 50% of the cost by 2030.

The relationship between semiconductors and the automobile industry will continue to strengthen as time goes on. Modern-day cars are experiencing an array of innovations that need increased numbers of electronic devices. This ensures big business opportunities for semiconductor suppliers focused on automotive electronics, as car companies will continue to turn to them for sensors, braking systems, cameras, ADAS systems, and more.

Semiconductors and Drone Technology

Drones have seen limited use since the 80s. But thanks to recent investments and loosening government regulations, practical applications for drone technology have been expanding faster than ever before.

Drones are now used extensively in industries like infrastructure, agriculture, transport, security, entertainment, insurance, telecommunication, and mining. It is estimated that the value of drone-powered solutions is more than $127 billion across all applicable industries—and growing at a rapid rate. By 2021, drone sales are expected to surpass $12 billion with a compound annual growth rate of 7.6%. Consumer drone shipments are expected to hit 29 million by 2021.

The drone market is controlled by public, established companies and privately-held startups who use semiconductor suppliers to build 3D cameras, microprocessors, microcontrollers, light detection and ranging (LIDAR), and gyroscopes.

These companies are moving drone technology forward at an incredible pace. New capabilities are being released every month and drone manufacturers are doing all they can to improve obstacle avoidance, artificial intelligence, and context awareness so drones are more capable of making decisions that speed up business and generate more value.

As drone makers push the ball forward, they’re looking for greater processing power and smaller sizes from chip manufacturers. This has incentivized massive companies like Intel and Qualcomm to get involved in the budding industry. While today’s drones are mainly used for capturing aerial photo and video footage, future drones will be expected to navigate autonomously and make real time decisions. This can only happen, however, if the semiconductor industry is able to keep up.

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Jack Trompert

In 2010, Jack and Janet Trompert started Talent 101 with a clear new vision on how to deliver talent to the marketplace. To work at Talent 101 is to be a part of something creative and big. From our modest roots as an ambitious startup, to becoming a global workforce solution provider to the world’s most recognized semiconductor companies, our growth and momentum owes a lot to our strong company culture of customer service, can do attitude, sense of urgency and always focus on the client and talent.

jackt@talent-101.com