Volkswagen Secures Chip Supplies by Signing Direct Deals with Manufacturers

Volkswagen Secures Chip Supplies by Signing Direct Deals with Manufacturers

By directly partnering with over 10 semiconductor manufacturers, Volkswagen ensures stable chip supply, enhancing automotive technology resilience.

Volkswagen Group has taken a significant step by directly purchasing semiconductors from over 10 manufacturers to ensure a steady supply of vital components for its vehicles. This strategic decision marks a departure from their reliance on Tier 1 component suppliers for chip procurement. Notable names like NXP Semiconductors, Infineon Technologies, and Renesas Electronics are among the companies collaborating with Volkswagen in this new approach.

Strengthening Supply Chain Security

The German automaker’s shift towards engaging with chip manufacturers directly is driven by the need for a more secure supply chain. With the automobile industry undergoing a rapid shift towards electrification and the integration of advanced autonomous driving features, the demand for semiconductors has surged. To address this challenge, Volkswagen is establishing direct partnerships to enhance its supply planning and safeguard against potential disruptions.

From a Few Chips to Thousands: Evolution of Electronics in Vehicles

Highlighting the remarkable evolution of automotive technology, the VW Group drew attention to the substantial growth in semiconductor usage. The journey from the installation of a mere eight semiconductors in the control unit of a Porsche 911 back in 1978 to the staggering count of around 90 control units and a staggering 8,000 electronic components in a modern Skoda Enyaq showcases the profound transformation the industry has undergone.

Automotive Industry’s Expanding Role in Semiconductor Market

Once a modest contributor to the semiconductor market, the automotive industry has climbed the ranks to become a significant player. Currently occupying the fifth spot with a market value of $47 billion, the industry’s reliance on semiconductors has surged with technological advancements. Forecasts predict a remarkable trajectory, projecting the automotive sector to capture the third position by 2030, with an estimated market volume of approximately $147 billion.

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Securing the Road Ahead

As Volkswagen Group takes proactive measures to secure its chip supply through direct collaborations with semiconductor manufacturers, the automotive industry’s role in the global semiconductor market continues to gain prominence. With the increasing complexity of vehicles and the integration of cutting-edge technologies, such initiatives underline the critical importance of robust supply chains to support the evolution of modern automobiles.

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