Singapore, already a major electronics manufacturing hub, will be an increasingly important player in the global semiconductor supply chain, with the auto industry driving most of the demand for microchips made here.

It is widely known that silicon microchips – the building blocks of all things electronic – are used in mobile phones, computers and televisions.

But it is easy to overlook how electrified and smart cars have become over the years – made possible by chipmaking advancements.

A conventional fuel-powered car today uses between 50 and 150 chips to run onboard electronics that manage lighting, fuel efficiency and the vehicle’s performance and handling.

The chip count skyrockets in electric cars where, as the name suggests, everything runs on electricity or a radio frequency signal that is managed by microchips. Some of the latest EVs use more than 3,000 chips – conveniently packed in electronic control units (ECUs) that are tucked behind the dashboard or just under the floor.

Asia led the export of electronic integrated circuits in 2022, with Taiwan, China and Singapore taking the top three spots.

In fact, the amount of silicon content in most cars is slated to soon exceed US$3,000 (S$4,020) from the current US$350. In a high-end EV, the chip price tag could go up to as much as US$6,000 in the not-so-distant future.

By 2030, every third car on the road will be an EV, according to a 2023 global study by the International Energy Agency. In the same period, the number of chips in conventional and hybrid vehicles will also double, as the competition to produce more efficient and more intelligent cars heats up.

Of course, at the same time, a host of other consumer electronics such as mobile phones, computers, TVs, air-conditioners and refrigerators will also need more semiconductors.

The semiconductor industry saw a surge in demand as computer and mobile makers raced to meet the work-from-home boom from late 2020 to most of 2022.

But the large chip inventories built up by electronics manufacturers meant chipmakers had a glut since last year.

Singapore Semiconductor Industry Association (SSIA) executive director Ang Wee Seng said that while this has lowered sales growth worldwide, the local industry would have been much harder hit if not for the steady demand for automotive chips.

“While there is a drop in demand for chips in general, our foundries are still in better shape to an extent because of the ongoing demand from the automobile industry,” he told The Straits Times.