Volkswagen takes the lead to avoid possible future semiconductor shortages

Even if the situation has returned to normal for a few months, the demand for semiconductors is still high and Volkswagen prefers to anticipate a possible future shortage.

After an unprecedented shortage, caused in particular by the health crisis and the technological progress of our cars, the Volkswagen group takes the lead and begins to buy directly from a dozen manufacturersincluding NXP Semiconductors, Infineon Technologies and Renesas Electronics, semiconductors in anticipation of a possible new global shortage.

Last October, “the manufacturer has started to enter into direct agreements with chip manufacturers in order to guarantee the security of its supply”according to Skoda Purchasing Director Karsten Schnake, who is also responsible for the Volkswagen Group’s COMPASS (Cross Operational Management Parts & Supply Security) task force for component sourcing.

Cars or computers?

The increasing electrification of vehicles and the trend towards more and more frequent use of assistance functions for autonomous driving increase the demand for semiconductors.

“In 1978, only eight semiconductors were installed in the control unit of a Porsche 911. Today, a Skoda Enyaq has around 90 semiconductors with some 8,000 electronic components”Volkswagen said in a press release.

According to the manufacturer, the value of a vehicle’s electronic components will more than double by 2030compared to the current average which is around 600 euros per vehicle.

“Today, the automotive industry ranks fifth among major buyers, with a global semiconductor purchase volume of approximately $47 billion”, said Volkswagen. By 2030, the industry is expected to take third place with a market volume of approximately $147 billion.

Semiconductors, the new black gold for Volkswagen?

Volkswagen and Franco-Italian chipmaker STMicroelectronics announced plans to co-develop a new semiconductor last July, marking Volkswagen’s first direct relationship with a semiconductor supplier.

The German government has attracted the largest chipmakers in the world by granting them billions of euros in subsidies. The American company Intel and the Taiwanese company announced plans to build factories in the country this year.

The manufacturer also plans reduce the variety of chips required in its vehicles in order to simplify the supply chainwhich will also help simplify its software offering.

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