vehicle-chip-cost-to-double-by-2030-says-niti-aayog

The cost of semiconductor chips used in automobiles is set to double to USD 1,200 per vehicle by 2030, owing to the growing integration of advanced technologies in the automotive sector, a new report released by NITI Aayog has revealed.

 

At present, the average cost of chips per vehicle stands at around USD 600. However, the adoption of electric powertrains, smart connectivity, and autonomous driving features is pushing up demand for high-end semiconductors, the think tank said.

 

“With the integration of these cutting-edge technologies, the cost of semiconductor chips per vehicle is projected to double, rising from USD 600 to USD 1,200 by 2030,” NITI Aayog said.

 

The report emphasised the dramatic shift the global automobile industry is undergoing, as it transitions from internal combustion engines to electric vehicles (EVs). These EVs increasingly feature advanced driver assistance systems (ADAS), Internet of Things (IoT) connectivity, and autonomous driving (AD) capabilities, all of which rely on sophisticated chipsets.

 

As automobiles grow more intelligent and interconnected, the report noted, the role of semiconductors and electronics has become increasingly central—not only to vehicle design and performance, but also to the broader global manufacturing landscape.

 

NITI Aayog said the convergence of the automotive sector with electronics, artificial intelligence (AI), and semiconductor industries was giving rise to new forms of interdependence. This evolution is also affecting adjacent sectors that support automotive production.

 

“The automotive industry's deep linkages with other key industrial sectors—such as steel, textiles, leather, rubber, plastics, glass, and IT—make it one of the largest consumers of various industrial products worldwide,” the report observed.

 

According to the findings, the global market for automotive components was valued at approximately USD 2 trillion in 2022, with traded components accounting for nearly USD 700 billion—or about 30 per cent of the total value.

 

The sector has recorded a consistent growth rate of 4 to 6 per cent annually over the past five years, driven by rising consumer demand, growing interest in personal mobility, and an increasing shift towards smarter, sustainable vehicles.

 

The demand for chips and advanced automotive components is expected to remain strong in the coming years, as the push towards smart mobility and electrification continues to reshape the industry's future.