According to Reuters, on August 23, Volkswagen stated that it has begun direct procurement of strategically significant chips from 10 manufacturers, including NXP Semiconductors, Infineon Technologies, and Renesas Electronics. The company believes there will be a global shortage of such chips.
Karsten Schnake, the head of Volkswagen's parts supply working group, said that to ensure a secure supply, Volkswagen began signing direct agreements with chip manufacturers since October of last year. Previously, Volkswagen relied on component suppliers to purchase chips.
Dirk Grosse-Loheide, the head of procurement for the Volkswagen passenger car brand, stated, "Global market capacity is insufficient. We have to take action." With the increase in electric vehicle production and the rising market demand for complex software, the automotive industry's demand for chips has surged. However, the pace of supply has been slow, given the complexity of building chip factories.
In July of last year, Volkswagen and STMicroelectronics announced plans to jointly develop a new semiconductor. This was the first time Volkswagen established a direct partnership with a second or third-tier semiconductor supplier.
The German government hopes to increase production capacity by offering billions of euros in subsidies to chip manufacturers. This year, Intel and TSMC announced plans to build factories in Germany.
Schnake mentioned that Volkswagen has not yet established a direct supply relationship with TSMC, the world's largest semiconductor foundry, but meets with TSMC every few weeks to communicate demand. Schnake added that Volkswagen also plans to reduce the variety of chips required for vehicles to simplify the supply chain and help streamline software products.
