What would the electronics industry do if automotive demand were to pull a Thelma and Louise and head off the proverbial cliff?
The auto recovery has been the axle of the Western supply chain since 2008. The drivetrain is starting to show some wear, however, with market followers forecasting nominal growth at best for 2016.
The good news is electronics content in vehicles continues to increase, rising to 8.9% of the $1.42 trillion worldwide electronic systems market last year, up slightly from 8.6% in 2014. Moreover, forecasts call for the share to continue to rise over the next several years.
Less clear is the extent, if any, the seers account for the potential for widespread ride-sharing trends or – worse for some – outright banning of vehicles.
To wit: Some 27 million Americans alone will use some form of ride-sharing at least once this year, a figure that doesn’t include traditional car-pooling. Urban millennials are growing up without the preconception that vehicle ownership equates to status, an important cultural shift.
A drop in demand for hybrid/electric (HEV) could also decelerate electronics growth. Hybrid sales alone dropped 15% year-over-year in 2015 – reversing a big gain in 2014 – and bottoming oil prices have kept the market for electric sluggish. Hybrids carry almost twice the electronics content of conventional gas autos, making HEVs a key growth engine for electronics makers.
More disconcerting to the auto supply chain is the prospect of a carless environment. This is actually happening, and in places you wouldn’t necessarily associate with technological backlash. For example:
- Bogota, Colombia, has been car-free on Sundays since 1976, a move that sidelines an estimated 1.5 million vehicles.
- Likewise, Jakarta has sponsored Car Free Day every Sunday since 2007.
- San Francisco shuts certain streets to vehicle traffic on various Sundays throughout the year.
- Oslo plans to ban cars from the city center by 2019.
Car-free days are becoming so widespread the phenomenon has its own Wikipedia entry. In fact, now there’s even a World Car Free Day (Sept. 22).
Transportation – be it for humans or products – is one of the obvious grand-scale problems that needs to be addressed in the coming years. But will this be done via a cultural shift, or through technical evolution?
When it comes to maximizing available roadways, autonomous vehicles could resolve some efficiency problems that otherwise plague human operators.
Self-driving cars, for instance, wouldn’t get distracted by such things as cellphones or accidents, and could hypothetically be programmed to always pick the fastest route. I’m not optimistic, however. People will still tend to want to go to the same place at the same time (which, unfortunately, is almost always exactly the same time I’m going there). Telecommuting only goes so far, and if artificial intelligence advances to the point where robots can conduct without intervention much of the operations currently overseen or performed by humans, we will have a lot more to worry about than being late to work. And that doesn’t begin to resolve the dilemma over how to program-in ethical considerations, such as if an autonomous vehicle senses there’s a pedestrian in its way, and a collision is otherwise unavoidable; should it run over the walker, or veer into another lane of traffic, even if it senses the maneuver would cause a high-speed accident with another object? (I’d hate to be the fellows at Tesla or Ford trying to work out that problem.)
Assuming vehicles don’t run out of road in the near future, what I am eager to see is the extent to which designers integrate printed circuits with the vehicles themselves. The form factor is becoming the key entity, and OEMs are designing product not as an array of piecemeal parts but as a system. That means viewing the electronics, electrical, wire harness and mechanical components all as part of a single finished device. Could we see circuits printed right on the bumpers, eliminating the wire harness? The potential for innovation is immense.
The electronics supply chain has gotten plenty of mileage from the automotive industry for nearly a decade. As the sector keeps trucking on, however, some real diversions are likely to appear down the road.