In the latest move by an automotive manufacturer to secure semiconductor supply, Germany's Volkswagen has partnered with Swiss semiconductor manufacturer STMicroelectronics to develop automotive chips for its cars.
Volkswagen and its software unit Cariad said yesterday that they are launching a system-on-chip (SoC) wafer with STMicroelectronics that will be manufactured for ST by Taiwan Semiconductor Manufacturing Company (TSMC). The product forms part of Volkswagen's strategy to enter direct relationships with tier 2 and tier 3 semiconductor suppliers for the first time. Cariad will direct Volkswagen's tier 1 suppliers to use only the SoC co-developed with ST for Volkswagen's vehicles, which it hopes will secure the company's chip supply years in advance.
The chips will be designed specifically for the needs of automotive systems in providing networking, drivetrain and energy management functionality as well as comfort electronics. All of the new generations of Volkswagen's vehicles that will be based on the unified and scalable hardware and software platform. By contributing the carmaker's specific target requirements and functionalities, the partnership will extend the architecture of ST's automotive microcontroller.
ST's processors will enable Cariad to develop a common software programme that will map future functions to the chips with an over-the-air upgrade and add multiple functions to each electronic control unit, reducing the number of chips in a vehicle.
"With the planned direct cooperation with ST and TSMC, we are actively shaping our entire semiconductor supply chain. We're ensuring the production of the exact chips we need for our cars and securing the supply of critical microchips for years to come," said Murat Aksel, Volkswagen's board member for purchasing.
Cariad aims to enter into co-development of high-performance semiconductors for more complex functions in the future, the company said.
Volkswagen's move to work with tier 2 and tier 3 suppliers is part of a growing trend among automotive manufacturers to reposition their supply chains to produce their own semiconductors. A shortage of chip supply in the past two years has resulted in most of the major vehicle manufacturers cutting back production or producing vehicles without certain features enabled by electronic systems.
Swedish carmaker Volvo said in reporting its earnings yesterday that its vehicle production fell by 22pc year on year in the second quarter to 132,100 units, after a 9pc drop to 169,000 units in the first quarter, owing to the semiconductor shortage. But Volvo Cars chief executive Jim Rowan said that the company has resolved a shortage of a specific type of semiconductor it faced in the second quarter, "so we now have semiconductor supply, as we would expect to accelerate us through the back end of 2022".
Volvo has been diversifying its semiconductor supply chain, shifting towards double sourcing and working with suppliers outside China, where extended Covid-19 lockdowns have disrupted production.
Dutch automotive chip manufacturer NXP Semiconductors said yesterday that it has signed an agreement with Taiwanese electronics manufacturer Hon Hai (Foxconn), which is moving into electric vehicle (EV) production. The companies will develop platforms for electrification, connectivity and safe automated driving based on NXP's components including processors, analogue-front-end, drivers, networking and power products.
The deal is Foxconn's latest move to ensure supply for its new vehicle production. Earlier this month, Foxconn invested 500mn yuan ($74mn) in a 10pc stake in Shengxin Materials Technology "to obtain a stable supply of upstream [silicon carbide] SiC substrates" so that "Hon Hai can strengthen the vertical integration of electric vehicles and semiconductor supply chains". The company last year acquired a chip fabrication facility to set up its Hongyang Semiconductor unit, and will complete the construction of an SiC production line later this year. Shengxin Materials Technology will supply its substrates to Hongyang Semiconductor.
South Korean carmaker Hyundai reported a 5.2pc increase in its global sales from May to June as it worked to minimise the impact of component shortages, with sales still down by 4.5pc year on year. Hyundai is also securing its semiconductor supply chain, with its components subsidiary Hyundai Mobis announcing plans earlier this year to invest 3 trillion-4 trillion South Korean won ($2.23bn-3.00bn) in developing semiconductors as well as software and autonomous driving products. Hyundai Mobis said last month that it expects a total of $3.75bn in orders this year from global automotive manufacturers, excluding Hyundai and its Kia business, up by nearly 50pc from 2021.
