Core Viewpoint - The article discusses China's push for automotive chip localization amid increasing US-China tech competition, aiming for 100% self-developed chips by 2027 [1][3]. Group 1: Government Initiatives and Industry Response - The Chinese government, through the Ministry of Industry and Information Technology (MIIT), is leading the initiative for automotive chip localization, with a target to increase the domestic chip usage rate from 25% in 2024 to 100% by 2027 [1]. - Major Chinese automotive brands, such as Geely and BYD, have expressed willingness to prioritize the use of domestic chips, reflecting a strong commitment to this initiative [1][2]. - Despite the lack of a mandatory requirement for 100% localization, the automotive industry is actively collaborating with domestic wafer manufacturers like SMIC to explore the feasibility of domestic alternatives [1][2]. Group 2: Challenges and Strategic Adjustments - The automotive chip localization faces significant challenges, particularly in the autonomous driving sector, where there is still heavy reliance on US suppliers like Nvidia and Qualcomm [1]. - Chinese automotive manufacturers are adopting flexible strategies by using consumer-grade chips for non-core functions, which reduces costs and shortens testing and certification times to 6-9 months, compared to several years for European manufacturers [2]. - Chinese chip companies, such as SemiDrive, are beginning to expand into international markets, indicating a new phase for Chinese chip manufacturers [2]. Group 3: Market Dynamics and Future Outlook - The global demand for automotive chips is surging, making automotive chip manufacturing a crucial strategic direction for China's semiconductor industry [3]. - The rapid expansion of China's mature process nodes is creating price pressure in markets for microcontrollers and analog chips, although the overall self-sufficiency rate in semiconductors remains low, with only 17.5% of domestic demand expected to be met by 2025 [2][3]. - The shift towards automotive chip localization is not only a part of national technology strategy but also signifies a fundamental change in the global automotive supply chain, potentially altering the competitive landscape in the automotive market [3].