Demand For E-SIMs Expected To Rise By 3 Million Due To Connected Vehicles In the Next 1 To 1.5 Years

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Automakers’ increasing emphasis on connected vehicles is projected to fuel a surge in e-SIM demand, with an estimated addition of 3 million units over the upcoming 12-18 months. Such a rise in e-SIM requirements is set to enhance business prospects for telecom operators. Furthermore, specialists forecast that by 2025, integrating e-SIMs in cars will lead to a fourfold increase in the demand for semiconductor chips.

Automakers are increasingly focusing on connected vehicles, predicting a rise in demand for embedded SIMs (e-SIMs) by about 3 million in the next 12-18 months. This shift is anticipated to boost enterprise business for telecom operators significantly.

The growing popularity of e-SIMs in cars is also expected to result in a fourfold surge in semiconductor chip demand by 2025. Bharti Airtel’s spokesperson highlighted that this trend is primarily driven by manufacturers launching internet-enabled vehicles prioritising connectivity and smart features.

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At present, e-SIMs represent just under 1% of telecom enterprises’ revenue. But with the forthcoming 5G rollout and rising Internet of Things (IoT) adoption, this figure is poised to grow substantially. This trend in connected vehicles will further amplify the demand for semiconductor chips.

Sunjay Kapur of Sona Comstar noted that the increasing demand for chips stems from evolving regulations, consumer preferences, and rapid vehicle software composition shifts. For context, nearly half the orders for Kia India’s recently launched Seltos SUV are for variants with Advanced Driver Assistance Systems (ADAS), reflecting the growing consumer appetite for advanced safety and technology features.

Aditya Joshi from OpalForce mentioned that the marriage of 5G and evolving smart car technologies will further enhance vehicle semiconductor use. Industry projections estimate that India’s semiconductor chip demand will skyrocket to USD 100 billion by 2025, driven by IoT and 5G. Considering that a single connected vehicle might contain 1400-3000 chips, the demand for chips will rise as connected vehicles become more common.

Gaurav Gupta of MG Motor India acknowledged the strong consumer response to their vehicles with connected technologies. Vehicles are increasingly using e-SIMs, which, unlike traditional SIMs, can better handle environmental variations. These e-SIMs aid in transmitting telematic data, such as vehicle diagnostics, offering telecom giants like Airtel and others an avenue for participation. Airtel emphasized the role of analytics in enhancing safety features based on real-time driving patterns.

Lastly, experts underline the importance of optimizing supply chain efficiencies for continued e-SIM growth in the auto industry. Given the current disparity between demand and supply, especially due to pandemic-related challenges, strategies like reduced import taxes and improved warehousing are crucial.

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Aryaman Raghuvanshi
Aryaman Raghuvanshi
Aryaman Raghuvanshi is a Journalist at EFY. His passion is to explore the future of mobility, which gets him to cover latest technologies shaping the future of automobiles and EVs. But, at times he writes on broader technologies too. LinkedIn: https://www.linkedin.com/in/aryaman-raghuvanshi-2431b7153

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