Munich Silicon instead of aluminum: for car manufacturers, chip supply is becoming a question of survival. More and more brands are now securing supplies directly from the manufacturers. Ford goes one step further: The US group has just announced that it will in future be purchasing components it has developed directly from Globalfoundries, one of the largest contract manufacturers in the semiconductor industry worldwide.
Ford is not only omitting automotive suppliers such as Bosch, Continental or ZF. The Americans are also trying to get by without large autochip specialists like Infineon or NXP.
Tesla has pioneered its own chips in recent years. These days, more and more automakers are following suit. On the one hand, to avoid future delivery bottlenecks that are currently slowing down business. On the other hand, they try to set themselves apart from the competition.
“The car manufacturers have to get more control over their chip supply,” says Peter Fintl, semiconductor expert at the consulting company Capgemini. Every car manufacturer is currently examining whether or how they can bring chip know-how into the company.
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The corporations are going different ways. Ford relies more on self-developed semiconductors, which are to be created in future in partnership with the contract manufacturer Globalfoundries. “It is critical that we break new ground in working with suppliers,” said Ford CEO Jim Farley. In this way, the group could offer customers functions that they “will appreciate most in the future”. This agreement is “just the beginning and an important part of our plan to vertically integrate key technologies and capabilities”.
General Motors wants to reduce the variety of chips
Rival General Motors, on the other hand, is looking to join forces with established car chip specialists. These include the Dax group Infineon and its European competitors NXP and ST Microelectronics. Together with these, new semiconductors would be developed. The goal is to get by with just three chip families in the future and thus reduce the variety of types by 95 percent, said GM President Mark Reuss. Instead, more functions are to be integrated into the individual components.
The lack of chips has been troubling car companies around the world for months. In October, registrations in Germany fell by more than a third to just under 179,000 vehicles compared to the previous year. In China, the world’s largest car market, sales therefore fell by almost ten percent: to 2.3 million.
The market researchers from Alix Partners assume that 7.7 million fewer cars will be produced than planned this year due to the delivery bottlenecks. The car brands lose thereby a turnover of 210 billion dollars.
The electric car pioneer Tesla has been relying on chips that it developed in-house and on close partnerships with semiconductor manufacturers such as contract manufacturers TSMC and ST Microelectronics for years.
In-house development is a risky matter, requires a high level of technical competence – and only pays off when there is a certain production volume. But it also makes the group more flexible in order to be able to react to bottlenecks. “Tesla shows that it can be a competitive advantage when a manufacturer relies on specially designed semiconductors,” says Capgemini consultant Fintl.
What the German carmakers are planning
News similar to that from Ford and GM is likely to come from German car companies soon. “We are striving for strategic partnerships with chip manufacturers in Asia,” said VW boss Herbert Diess recently. The group is also working on its own semiconductors: “We are making good progress there. We are going into the next software and electronics architecture with our own chips, which in future will mainly be visible in the Wolfsburg Trinity project. ”Trinity is the name of a planned series of electric models from VW.
The first self-developed semiconductors for Trinity will be used from 2026 and, according to Diess, will be very vehicle-specific: “Today’s semiconductors come largely from the consumer electronics and telecommunications sectors. That also explains the shortage: We have to share the amount of chips we have with other industries, ”explained the manager. “With our own chips tailored to the automotive industry, we can also achieve further competitive advantages.”
Meanwhile, Daimler is approaching semiconductor manufacturers more closely: “As with battery cells, we will be much deeper involved in the supply chain,” said Chief Development Officer Markus Schäfer at the IAA mobility fair in late summer. In the future, there will be closer business relationships with chip manufacturers directly and not just with intermediate auto suppliers. The chip companies will also talk about their “capacity expansion and geographic location”.
Building up your own know-how should not be easy, however, fears consultant Fintl: “The most difficult thing is to get the right chip designer.” The experts are in demand all over the world.
Infineon is investing significantly more than last year
According to the Capgemini semiconductor expert, the carmakers would not be able to get along completely without the established chip companies. Especially since the manufacturers are making every effort to finally overcome the delivery bottlenecks. “For the next few years we were able to agree substantial additional capacities with various of our manufacturing partners,” said Infineon boss Reinhard Ploss recently.
The Munich-based company only produces some of its goods in its own factories, for the rest they rely on Globalfoundries or TSMC. At the same time, Infineon wants to invest 2.4 billion euros in factories and machines in the fiscal year that has just started. That is 800 million more than in the past fiscal year.
No matter what car manufacturers and chip companies agree these days: semiconductors will remain scarce for the time being. Because the foundries would primarily invest in state-of-the-art technologies, such as those used for cell phones or computers, says Infineon Production Director Jochen Hanebeck. But they are not in great demand for the vehicles.
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