The Delta region sees a strong boost in automotive and circuit industry integration

Shanghai and neighboring provinces are increasing collaboration between automotive and integrated circuit industries to strengthen industrial chains in the Yangtze River Delta region, officials said on Tuesday in Shanghai.

In-vehicle electronics and chip demands are surging with the development of new energy vehicles (NEVs) and autonomous driving. In the first nine month of this year, the revenue of Shanghai's automotive electronics industry jumped 15 percent, much higher than the GDP growth of the period, according to the Shanghai Commission of Economy and Informatization.

Over 50 vehicle and component firms, and 100 chip firms in the Yangtze River Delta region, along with banks and industry associations of Shanghai and provinces of Zhejiang, Jiangsu and Anhui, attended the event in Shanghai on Tuesday to enhance integration and business cooperation.

Automotive electronics now accounts for 55 percent of a car's total cost on average, compared with 25 percent a decade ago. The portion will continue rising when cars become more connected and intelligent, said Qin Shu, secretary general of the Jiangsu Integrated Circuit Industry Association.

On average, a new energy car's total semiconductor cost reaches US$786 to US$859, double the level of a traditional car, according to TF Securities.

Firms are encouraged to deepen integration and cooperation to strengthen industrial chains in the Yangtze River Delta region. It helps boost innovation, improve management, and hedge against industry-wide risks like inflation and geopolitical challenges, speakers told the event.

The Bank of China said it will offer support, including financing and investment funds, to boost tech innovations in the region.