The semiconductor industry has been stretched to the limit because of AI. And self-driving cars are going to stretch it even further

The global semiconductor industry faces unprecedented pressures driven by the explosive growth of artificial intelligence and the looming reality of self-driving cars. This surge in demand has significant implications for Europe's digital sovereignty and its ability to compete in a technology-driven global market, potentially impacting the cost and availability of essential technologies. Autonomous vehicles, in particular, are poised to drastically reshape the semiconductor landscape. PwC's projections indicate that fully autonomous (Level 5) vehicles will require a fivefold increase in semiconductors compared to traditional vehicles, driving up the cost of these components by a factor of ten. This shift translates to a dramatic increase in chip requirements, with Level 5 vehicles potentially demanding over $5,000 worth of semiconductors compared to the $500 cost for basic vehicles. This escalating demand directly affects European consumers, businesses, and policymakers. Higher semiconductor costs could translate to increased prices for vehicles and other technologically advanced products. Moreover, the availability of these crucial components has implications for the continent's ambition to develop its own competitive automotive industry and strengthen its digital independence, making European firms increasingly reliant on external suppliers. The anticipated semiconductor shortage highlights the importance of the European Chips Act, which seeks to boost domestic chip production and reduce reliance on external markets. Future developments will be crucial to shaping Europe's ability to navigate this technological shift and secure its place in the global automotive and digital landscape.