Semiconductors are used throughout the power control unit (PCU) of Toyota's hybrid system. The PCU governs the flow of electricity between the battery and the electric motor during driving—and sends electricity back to the battery when the driver lifts off the gas or brakes—a process known as regenerative braking. It's therefore a vital component of the average hybrid vehicle, and semiconductors are a vital component of the PCU.
Unfortunately, they're also an electrically restrictive component. Toyota says the PCU accounts for a quarter of the total electrical power losses in a hybrid drive system, and semiconductors alone make up a full fifth of the total. Reduce electrical losses through a semiconductor, and you can make your hybrid system (and therefore your car) more efficient. Toyota has done this, in theory at least, using a new silicon carbide material for its semiconductors, rather than a standard silicon unit. It's also managed to reduce the size of the wafer-like semiconductors by 80 percent, sure to improve the space efficiency of the PCU.
The end result is a 10 percent economy improvement on Japan's JC08 economy cycle. JC08 bears little relation to EPA tests (it's heavily city-biased, for one) but that's still a large improvement for changing one type of component alone. And naturally, it's not all about Priuses—applied on a wider scale, semiconductor improvements could boost the efficiency of any electric or hybrid vehicle, from Toyota and Lexus's own products to hybrids with a little more zip—think BMW i8s or Porsche 918 Spyders. Toyota is now "boosting development activities" on the technology in order to bring it to market sooner rather than later.