DETROIT – The business model for automotive electronics is about to change.

That’s the bottom-line message from Wolfgang Ziebart, CEO of Infineon Technologies AG, in a keynote address Monday (Oct. 18) to the biennial Convergence International Congress on Transportation Electronics.

Technology “growth will take place in a different way than it did before,” says Ziebart, adding, that will open up opportunities for new businesses such as software developers but make some electronic components – such as central controllers – commodities.

“Usually, technology matures with kaisen-type improvements, where it gets 5% better per year, then there’s a breakthrough development,” he says. He points to fuel systems that saw improvements in carburetor technology year after year until electronics provided the breakthrough of fuel injection. It was similar with brake systems, he says, which took the next leap to antilock capability with the addition of electronic controls.

Infineon CEO
Wolfgang Ziebart

“I’m sure now that the next breakthrough in automotive electronics will not come by adding more controls but by networking existing units,” Ziebart says. “New function will come not from hardware but through increased communication by sensors and actuators.”

Ziebart says that approach to automotive electronics will open up new possibilities in vehicle control. Imagine, he says, if the car’s stability control system was networked with the navigation system or the airbag/seatbelt system could communicate with the stability-control system.

The stability system could anticipate the road ahead, and airbag performance could be improved if its electronics could act on information pertaining to the stability of the vehicle.

“So the improvement would come not from hardware but software,” he says.

Standing in the way of all this is the auto industry’s limited “ability to manage the complexity of the electronics system,” Ziebart says. What’s needed is a change in automotive electronic system architecture, he says.

Ziebart envisions one central computer operating each of the vehicle’s key “domains” of powertrain, body, safety and infotainment. Each controller would be linked to intelligent peripherals in the form of smart sensors or actuators. Items such as ABS systems that now have their own computer controls would become more simple intelligent peripherals reporting back to the central body computer.

Such an architecture would cut down on a vehicle’s need for expensive electronics hardware, Ziebart notes, but open the automobile up to software suppliers.

“This will impact the structure of the industry,” Ziebart predicts. “New business models will come up – software-only companies (will have opportunities) and some portion of the (electronics) hardware will become commodities. Central controllers, for example – (that) will become like buying memory for your laptop.

“Semiconductors will have very powerful processors and silicon will move into switches, actuators, sensors and motors – so packaging technology will be key.”

Industry coordinating groups such as Autosar in Europe, which seeks to establish standards for communications between electronic devices, will play a critical role in taking the auto industry to the next step in onboard electronics, Ziebart says. (See related story: Toyota-Nissan Link Raises Red Flags at Autosar)

dzoia@primediabusiness.com