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Electronics is Fueling the Auto Industry’s Growth

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Henry Ford’s Model T transformed the automobile industry a century ago with mass-produced cars that even the middle-class could afford. Today, however, the industry is undergoing an equally fundamental change, as it begins a major shift toward: • electric vehicles, • increasingly “connected” cars, • and, soon, the advent of self-driving, or “autonomous” vehicles. These initiatives have been made possible by advances in battery, semiconductor, communications and other enabling technologies, which are bringing new growth to the $200 billion-plus auto electronics market. Automotive semiconductors are especially well positioned for growth, according to IC Insights, which forecasts that annual auto chip sales will nearly double, from $22.9 billion in 2016 to $42.9 billion in 2021. Electric car investment soars Encouraged by government subsidies and mandates to reduce carbon emissions, automakers have poured more than $90 billion into electric car development in recent years, with lots of investment still to come. Nearly 1 million electric vehicles were sold worldwide last year, and while that was less than 1 percent of all global car sales, Moody’s Investors Service predicts that electric vehicles will make up 17 to 19 percent of the market by 2030. Connected cars – particularly those with high-bandwidth fifth-generation (5G) wireless capabilities – will play a critical role in enabling the next generation of increasingly more capable vehicles. PwC analysts expect nearly 470 million connected cars to be on the road in the U.S., the E.U. and China by 2025. Carriers plan to deploy the first 5G networks later this year. And while the main initial benefit is likely to be faster-loading maps, video and other content, drivers should also see marked improvements soon in their vehicles’ safety, navigation and infotainment systems, thanks to better internal communications, such as the increasing use of in-vehicle multi-gigabit Ethernet networks. Meanwhile, 5G networks should improve external communications with other cars, roadside infrastructure and traffic-management systems. The technology’s ability to transmit large volumes of bi-directional information with low latency (delays) will also be key to enabling the latest advanced driver assistance systems (ADAS). Automakers are already equipping new vehicles with ADAS safety features such as lane-departure warnings, blind spot detection, collision avoidance and adaptive cruise control. And as regulators begin making some of these capabilities mandatory, demand for sensors, signal processing chips, radar systems and other necessary hardware and software is only likely to increase. The worldwide ADAS market will be worth more than $60 billion by 2024, according to Global Market Insights. Autonomous vehicles Self-driving cars are categorized into different levels of capabilities, with most of today’s ADAS features falling into the “partial automation,” or Level 2, classification. Audi’s new A8 is the first commercially available vehicle with Level 3, or ”conditional automation” capabilities, including the ability to guide the car through low-speed traffic congestion. Tesla’s Autopilot technology and Google’s Waymo self-driving pilot program in Arizona are examples of more advanced Level 4, or ”high automation,” capabilities, in which vehicles are expected to do most of the driving, with occasional driver intervention. At Level 5, or “full automation,” vehicles should be able to drive themselves anytime, anywhere, under any conditions. The first Level 4 autonomous vehicles should hit the market in 2019, according to IHS Markit, which expects sales to reach nearly 1 million self-driving vehicles a year by 2021, and 33 million – or 26 percent of all new cars sold – by 2040. CES showcases auto advances The auto industry’s growing importance to electronics makers was on full display at the recent 2018 CES show in Las Vegas, where innovative concept vehicles, along with an array of safety, connectivity, infotainment and self-driving technologies, vied for attention with the show’s usual consumer gadgetry. Samsung’s interest in the auto industry has never been higher, as demonstrated by our $8 billion purchase of auto components maker Harman International Industries last March, our establishment of a $300m fund to invest in automotive start-ups and autonomous driving technologies and our 75 million euro strategic investment in safety software developer TTTech last September. We teamed up with Harman at this year’s CES gathering to show off several of our jointly developed connected car technologies. One highlight was a customized Maserati equipped with a “digital cockpit” that allows occupants to use their smartphones, and Samsung’s Bixby voice assistant, to personalize the vehicle’s climate, lighting and infotainment settings. The system’s hands-free control, along with a windshield-projected heads up display, allows drivers to operate phone apps and other services more safely while remaining focused on the road ahead. The companies also announced: • The new DRVLINE platform an open, modular autonomous driving ecosystem that allows Samsung and its partners to easily swap new components and technologies in and out as needed. • The industry’s first 5G-ready telematics solution, which meets 4G LTE standards now, as well as 5G standards in the future – when the same hardware will be able to provide up to 100X faster wireless connectivity. • A new forward-facing ADAS camera system for use in lane departure and forward collision warnings, pedestrian detection and automatic emergency braking. The annual CES show is always a great place to peer into the future, but it can also be an opportunity to reflect on the past. This year, after seeing the amazing technology reshaping the vehicles we drive, it’s tempting to wonder whether Henry Ford would even recognize one of today’s cars if he saw it coming off the assembly line. Maybe not. But he would no doubt be impressed. Published by Bita Sistani As director of automotive marketing, Bita Sistani is responsible for developing and executing business strategy on behalf of Samsung Device Solutions America’s automotive business focus.

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