Infineon unwraps learning centre to energise EVs
Germany’s Infineon, which makes components for eight of the top 10 electric cars on the market, has opened a learning centre alongside King Mongkut’s Institute of Technology Ladkrabang (KMITL) to encourage local companies to develop systems for electric vehicle (EV) parts.
The company’s project with KMITL is intended to attract small and mediumsized enterprises (SMEs), as well as larger companies to develop systems that could eventually run on Infineon components.
“This is a long-term investment, in the range of 3-4 years, which is the standard development cycle in the industry,” said Antonio Monetti, marketing director of Infineon Asia’s automotive division. “Eventually, we hope these players will use our components.”
The centre represents a small financial investment on the company’s part. Most of the funding for research and development (R&D) will come from Thai partners and the university.
Aside from encouraging R&D, Infineon will work with KMITL to develop a specialised curriculum in automotive electronics at the university, available to both partner employees and students.
The centre will initially focus on microcontrollers, sensors and motor control devices.
“But the focus will be on making local companies feel comfortable investing in or opening R&D centres in the automotive space, since there is already an ecosystem for it,” said Mr Monetti.
“When OEMs [original equipment manufacturers] think about where to establish their R&D centres, availability of talent is still the most important factor,” said Chua Chee Seong, president and managing director of Infineon Asia-Pacific. “The market itself is secondary.”
Five Thai companies have already expressed interest in joining the project: Novem Engineering, Teletronics, ThaiGerTec, Formula Industries and Damrongsilp Supplies. Some of these firms are already engaged in the design and production of automotive parts systems.
The company hopes to attract five more companies to join the project by year-end.
“Some of these companies produce industrial applications but are interested in expanding to the high-growth automotive sector,” said Mr Monetti. “A company that develops transformers might be interested in developing charging stations, or one that produces air conditioners for homes might develop air conditioners for cars. This is where we can help them bridge the gap.”
Thailand is a natural choice because it is the biggest automotive hub in Southeast Asia, the executives said, but Infineon is pursuing similar business models elsewhere.
“We invested in similar projects in China and Korea years ago, and now local players there are paying us back,” said Mr Monetti. “We have contributed to their success, and they have been loyal customers.”
He said the local firms with which Infineon works are unlikely to represent a competitive threat to the company in the future.
“They produce systems, not components. To produce components you need a different skill set and heavy investment,” he said.
Thailand has a long history in the automotive sector, but companies here have mostly been focused on manufacturing rather than development, which has traditionally been done in Japan, Europe and the US, near the headquarters for OEMs.
EVs represent a good opportunity to step up in the supply chain, since there is no clear leader in this niche, said Mr Seong.
“Thailand may never catch up to other countries when it comes to conventional vehicles, but it may have an opportunity in EVs, since everyone is starting from scratch,” he said. “The complexity of developing EV solutions is lower than that of developing combustion ones, and OEMs don’t have a monopoly on this research. You see companies like Google and Apple entering the EV space as well.”
In the past, most OEMs chose to do their R&D at their headquarters and then export the parts to markets like Thailand.
“EVs may be different, because the parts required for different vehicles vary so much,” said Mr Seong.
While large automotive firms may choose to design parts for sedans near their home turf, they may outsource the research for e-motorcycles or e-tuk-tuks to markets where these vehicles will be used the most.
The market for automotive semiconductor components in Thailand is currently $500 million (15.9 billion baht), but this figure is poised to grow as consumers switch to EVs.
“One way to look at it is that a traditional combustion engines uses $350 in these parts, while an EV uses $700-900,” said Mr Seong. “This means the market can double, even if the number of cars on the road stays constant.”
He said Infineon had no precise estimate for its share of the EV semiconductor market, but the company’s components are included in eight of the 10 best EV models sold globally.
The EV market, nevertheless, remains a minuscule part of total.
“China is the biggest market for EVs. Last year they sold 750,000 pure EVs, a small portion of the 30 million new cars sold in the country,” said Mr Monetti.
Globally, EVs represent less than 5% of cars sold, but the category has been growing more than 50% annually in recent years.
“More or less, all semiconductor suppliers are setting their sights on electric vehicles,” said Mr Seong.