Independent automotive electronics suppliers have changed

Dr. Chen Zejian, chairman of Etek Automotive Electronics (Wuhu) Co., Ltd. and chairman of Burtech Automotive Electronics (Wuhu) Co., Ltd., recently said in an interview with Gasch Auto that when he first returned to China 20 years ago, he could and knew how to be an independent supplier of automotive electronics, but after these years of development, in various tracks related to automotive electronics, many independent suppliers have developed into the head of particularly competitive automotive electronics suppliers.

Dr. Zejian Chen, Chairman of Etec Automotive Electronics (Wuhu) Co., Ltd. and Chairman of Botech Automotive Electronics (Wuhu) Co., Ltd

Just like Etek, since its establishment, it has grown into a leading supplier of automotive electronic parts for its own brand, with an annual supply of 15 million + automotive electronic products. According to Dr. Chen Zejian, in recent years, Etek's sales have continued to soar, growing at a growth rate of about 50% almost every year.

In Dr. Chen Zejian's view, the reason why the development of independent automotive electronics suppliers has advanced by leaps and bounds, especially thanks to the rapid growth of independent brand car companies, "independent brands have developed from 20% of the market share in the past to more than 50% now, which has brought many opportunities to independent suppliers." ”

This is not difficult to see from Etek.

As an enterprise established in 2003, ETC has a number of business units such as AITEC-Intelligent Vehicle Control, Botek-Intelligent Cockpit, and Yilaida-Intelligent Driving, and its main business includes three categories: intelligent body control electronic products, intelligent cockpit electronic products, and intelligent driving (ADAS) products.

As mentioned earlier, Etec's sales have grown rapidly in recent years. According to official data, the annual sales of Etek were 1 billion yuan in 2020 and increased to 1.45 billion yuan in 2021. Not only that, according to expectations, Atek's sales will reach 2.2 billion yuan this year and about 3 billion yuan next year.

Such excellent performance of Etek and the obviously good performance expectation are strongly related to the development of self-owned brand car companies.

From the perspective of market layout, ET currently supplies automotive electronic products to many traditional independent brands such as SAIC, GAC, Changan, Chery, Great Wall, Geely, etc., and according to Dr. Chen Zejian, its main domestic independent brand customers have obtained a good market position.

ET's market layout covers many self-owned brand car companies; Image source: Etek

In addition, among the new domestic car manufacturing forces, Etek also has a relatively wide customer layout and the supply of batch production, such as Xiaopeng, Lili, Nezha, Zerorun and so on. In addition, Etek is also cooperating with cross-border players such as Didi, Xiaomi, and Huawei to carry out some related projects.

It can be seen that in the current business sources of Etek, independent brands occupy a considerable weight. Even if you look back, independent brands are still the focus of its development.

Dr. Chen Zejian pointed out that the current new energy vehicle market is growing very fast, this year's sales have exceeded 5 million, next year may reach 8 million or even 10 million, coupled with new energy vehicles' demand for intelligence is particularly high, the subsequent value growth still has a lot of space and potential, "so we will focus on promoting the layout of the new energy field." ”

Traditional independent brands are also widely deploying new energy vehicles, such as Great Wall's Ora, Chery's Ant, Ice Cream, SAIC-GM-Wuling's Hongguang, Changan's Avita, GAC's Aion and so on. According to Gascar understanding, these traditional independent car companies' new energy brands, Etek also has a wide layout.

Of course, not only its own brands, but also in the previous 8 years of joint venture with Bosch (Etek established Bosch Multimedia in 2012, acquired Bosch Multimedia in 2019 and renamed it Bertek), Etek has also docked related projects from Audi, Volvo, Volkswagen and other car companies, and is currently adapting products with GM, Toyota and other car companies.

"In general, at present, from mainstream joint venture brands and independent brands, including new forces in car manufacturing and cross-border players, we have cooperated and have mass products, which has laid a very good foundation for the company's future development." Dr. Chen Zejian said.

It's not hard to see why independent suppliers can seize the opportunities presented by their own brands and even get more options for joint ventures or foreign brands.

As Dr. Chen Zejian said, independent suppliers have a faster communication response, and after years of patient cultivation in products and technologies, coupled with years of training and experience accumulation, local talents are increasingly able to meet market demand, which makes independent suppliers form the ability to compete with international brands locally.

Of course, another key point for Etek is that it is deeply engaged in those products that are particularly suitable for localization and independent brands.

Dr. Chen Zejian mentioned that there are two domains under the "reel" of the car, the power domain and the chassis domain, and there are three domains above the "reel", the body domain, the cockpit domain, and the ADAS domain, of which the power domain and the chassis domain involve functional safety, and the overall development is difficult, and there are not many companies in China that can really form a good market position in these fields, and the competition of domestic enterprises is mainly concentrated in the body domain, cockpit domain and ADAS domain.

These are precisely the three major areas that Etek focuses on and has already built.

EATEC operating structure; Image source: Etek

In the body domain, as automotive architectures become more and more centralized, the trend of replacing traditional dispersed small controllers with more functionally integrated body domain controllers is becoming more and more obvious. For its part, after 20 years of hard work and gradually breaking through every technical difficulty, it has the ability to integrate more than 50 functions into a single primary domain controller.

According to Dr. Chen Zejian, this year, the core domain control of Etek left and right / O (VIU) will be mass-produced in Changan and Ideal, "This domain control is based on the new SOA architecture in the current automotive field, that is, based on the separation of service software and hardware, which has been relatively advanced in the industry." ”

In the cockpit domain, the current trend is to combine the traditional instruments, navigation, central control screen, etc. in the past, and drive the interaction of all information in the entire front cabin through a box to form the so-called cockpit domain. EATEC retains its former competitive position in this area.

"We have been making instruments in China for nearly 20 years and have become very competitive. In addition, during the joint venture with Bosch, we also participated in some global projects related to HUD heads, forming relevant capabilities. Although we have not done much in navigation projects, now the chip computing power and chip integration are getting higher and higher, and there is no high technical threshold in this regard. Dr. Chen Zejian said.

In the ADAS domain, Etek has many layouts in millimeter-wave radar. Official data shows that after three years of R&D and mass production preparation, the shipment of Etek 77G millimeter-wave radar has reached about 135,000 sets in 2021, and is expected to reach about 300,000 sets this year.

Of course, Etek's layout in this sector does not stop there. Dr. Chen Zejian said: "We start with millimeter wave radar, and there is also a team doing L3, on the basis of the current R&D capabilities of the L3 team, we tend to do subtraction, L3 down to L2, L1, and then form a cross-domain product with our cockpit domain products, or form a more cost-effective cross-domain product with our body domain products." ”

In fact, under such a product layout, Etek has a more long-term consideration.

From the perspective of technological development trends, the integration of three domains, that is, the body domain, cockpit domain, and ADAS domain into one to form a central computing center, has become a major development direction recognized by the industry.

Three-domain integration; Image source: Etek

According to Dr. Chen Zejian, it is precisely for this reason that Etek has established three business units for these three domains, first solving the engineering capabilities and accumulation of three independent domains or partial leapfrogging technologies and mass production manufacturing, and finally combining the three domains into one to form a central computing platform.

It is understood that at present, Etek has a special project team in the early research and development of three-domain synthesis.

However, the process of technological upward has never been easy.

It is clear that today's automotive electronics are becoming more complex, and related manufacturers are facing new and higher requirements in many aspects, including information security and functional safety.

Dr. Chen Zejian said that this process is particularly human resources, and the number and ability requirements for engineers are very high, "In the past, 10 engineers may be able to arrange 10 engineers for a project, and now it may be difficult to arrange 30 or 50 engineers, especially for more complex platforms such as 8155 and 8295, sometimes hundreds of engineers still feel very difficult to participate." ”

He said frankly that Etek currently has about 1300 employees, of which about 500-600 R & D personnel, which seems to be close to half, but compared with the needs of this market development, there is still a big gap. It is precisely for this reason that in addition to the layout of R&D sites in Wuhu, Etek is also laying out some R&D sites in Hefei, Suzhou, Wuhan, Chongqing and other places to absorb more talents.

Of course, it's not just the talent problem that needs to be solved.

In the past two years, due to the serious imbalance between global chip supply and demand, as well as the repeated impact of the new crown epidemic, the global supply chain has seriously deteriorated, and supply cuts, price increases, and delivery cycles have been greatly extended frequently. This makes the ability to ensure stable supply one of the key capabilities that car companies consider when selecting suppliers.

Dr. Chen Zejian pointed out that a car is composed of thousands of parts, even if there is a lack of a screw this car can not be built, not to mention that now the degree of automotive intelligence is getting higher and higher, the demand for chips has been raised to a very high height, so the lack of core and the epidemic in the past two years has a great impact on the entire industry.

In such an environment, Etek is naturally affected by this. However, as Dr. Chen Zejian said, these two years have also coincided with the two fastest years of Etek's development, "Our sales are growing at a rate of about 50% almost every year. ”

This is not accidental, an important reason is that as early as before the lack of chips, in the direction of chip localization, Etek has already laid out.

On the one hand, upstream in the product chain, ETC maximizes its own chip supply. Etek's millimeter-wave radar uses Gatland domestic chips, and body instrument products also use a lot of domestic chips. It is understood that this year's Etek localization chip introduction rate has approached 30%, and it is very high among domestic electronic parts suppliers. It is worth noting that at present, many domestic chip listed companies, such as GigaDevice and Guoxing, are shareholders of Etek.

On the other hand, Etek began to assist car companies to promote localization very early. Dr. Chen Zejian said: "In the case of chip shortage in the past two years, because our research and development capabilities are particularly strong, the software and hardware architecture of the products are particularly good, and we can quickly switch from foreign chips to domestic chips, which also solves the problem of chip shortage to a certain extent." ”

Not only that, since its establishment, EATEC has developed strong production capacity in several business segments. According to the data, the annual production capacity of Wuhu Etek production base has exceeded 10 million sets, the annual production capacity of Wuhu Botek production base has also exceeded 5 million sets, and the annual production capacity of Wuhu Yilai production base and Baoding Botek production base has also exceeded 1 million sets and 1.5 million sets respectively.

"The ETC factory is very close to the world's first-class manufacturers in terms of manufacturing capacity, process and quality, and has some unique innovations in informatization and intelligence, which also allows us to form a unique and free competitiveness in products." Dr. Chen Zejian said at the end of the interview.