The Future of Mobility: How Semiconductors are Driving the Convergence of AI, IoT, and Connected Vehicles
By Rahul Prakash
The last decade has witnessed a major transformation in the automotive industry, driven by the rapid pace of technological innovation and the growing demand for tech-enabled smarter, safer, and more efficient vehicles. Connected and smart vehicles have reshaped the automotive landscape, seamlessly integrating with smart city infrastructure to enhance urban mobility and convenience. At the crux of this transformation are AI, IoT, and semiconductors, the three main pillars that support the development of these advanced vehicles and paving the way for a more connected and automated future.
According to a report by Mordor Intelligence, the Indian connected car market is anticipated to register a CAGR of about 20% during the forecast period (2024 – 2029). As the automotive landscape reshapes, the role of semiconductors will continue to evolve from supporting basic functionalities to powering highly complex, intelligent systems.
Autonomous driving represents one of the most ambitious goals in the automotive industry, where real-time data processing and decision-making are critical. Semiconductors enable vehicles to process data from numerous sensors—such as cameras, LiDAR, and radar—in milliseconds, transforming raw input into actionable insights. As advancements in AI algorithms make autonomous systems more accurate and reliable, high-performance semiconductors are essential to support increasingly complex AI models that can recognise and respond to countless scenarios on the road.
The demand for central compute and zonal controller architectures is pushing the development of powerful, efficient chips capable of handling high data loads. These new semiconductor architectures will allow for better integration of multiple sensors and intelligent functions in a single system, reducing response times and increasing safety.
The concept of the connected vehicle has evolved beyond basic internet connectivity to encompass edge computing capabilities within the vehicle itself. Today’s connected vehicles collect and process vast amounts of data that support features like real-time navigation, advanced driving assistance systems, remote access, and sophisticated infotainment systems like touchscreen displays, state-of-the-art audio systems and AI-integrated voice assistants. When integrated with smart city infrastructure, these connected vehicles have the potential to transform urban mobility through continuous information exchange between vehicles and city systems.
Semiconductors are central to this vision, providing the computational power necessary to process data locally within the vehicle while maintaining continuous connectivity with the cloud. This dual capability is critical for applications ranging from real-time traffic management to predictive maintenance and personalised in-car experiences. High-performance chips that support edge computing enable the car to process real-time data autonomously and act on insights, reducing latency and enhancing safety while optimising the user experience.
Beyond the vehicle itself, the role of semiconductors extends to the smart infrastructure that will support the next generation of mobility. As cities and regions develop smart grids, charging networks, and IoT-enabled traffic systems, the semiconductor industry will provide the necessary technology to power this infrastructure.
As consumer preferences evolve and demand for smart vehicles increases, various government policies and initiatives have also come into effect to promote the adoption of connected and smart vehicles. As part of this vision the implementation of the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles in India (FAME India) in 2019 was introduced with the aim to reduce vehicular emissions and support the local EV ecosystem by incentivising production and adoption. The rapid adoption of electric vehicles (EVs) demands semiconductor solutions that can support higher power levels with efficient energy consumption. This has spurred development in silicon carbide (SiC) and gallium nitride (GaN) semiconductors, materials known for their superior efficiency and heat management, which are particularly suited for high-power automotive applications.
The convergence of AI, IOT and advanced semiconductor technologies have ushered in a new era of connected and smart vehicles that is poised to transform the mobility industry. Despite the many advantages it brings, the widespread adoption of connected and smart vehicles is still met with various roadblocks. The main challenge is to align the different technologies to work together. However, with the challenges comes equal opportunities for growth. As the convergence of AI, IoT, and automotive technology accelerates, semiconductors will remain at the forefront, driving innovation and ensuring that vehicles are smarter, safer, and more efficient.
(The author is Rahul Prakash, Head of Mobility Products, L&T Semiconductor Technologies, and the views expressed in this article are his own)