How to Preserve the Automotive Chip Shortage From Happening Once more

Freda Walters

“The automotive source chain is a quite challenging animal,” said Bob O’Donnell president of TECHnalysis Investigate at an automotive technology panel held Monday at GlobalFoundries Fab 8 in Malta, N.Y. “And very couple people today recognize it.” O’Donnell manufactured this observation as element of a dialogue involving executives from the […]

“The automotive source chain is a quite challenging animal,” said Bob O’Donnell president of TECHnalysis Investigate at an automotive technology panel held Monday at GlobalFoundries Fab 8 in Malta, N.Y. “And very couple people today recognize it.”

O’Donnell manufactured this observation as element of a dialogue involving executives from the automobile and chip industries. The panelists portrayed a supply chain whose shortcomings have a short while ago brought vehicle makers to their knees. The panelists—who consisted of executives from chip company GlobalFoundries, IC maker Analog Equipment, technique integrator Aptiv, and automaker Ford—all agreed that this must never materialize again. 

In the meantime, the semiconductor content material in autos is developing at an unparalleled rate—and those semiconductors are becoming integrated into new architectures driven by the improve to electrical motor vehicles.

“We have to revisit risk management across the board,” explained Jonathan Jennings, vice president of world commodities buying and provider specialized support at Ford. He defined that the sector imagined it had been masking itself against risks by employing several suppliers. Nevertheless, they did not realize that those people suppliers or the suppliers of people suppliers ended up all using the output of the exact same little set of semiconductor foundries.

Kevin P. Clark, president and CEO of Aptiv, which as a Tier 1 supplier builds electronics systems for automakers, introduced a feeling of the scale of his company’s aspect of the offer chain, saying, “We obtain 220 million elements from 400 suppliers every day. Of which we make extra than 90 million factors delivered to 7000 to 8000 prospects day-to-day.”

Automobile makers generally deal closely with their Tier 1 suppliers, and Jennings explained persons in his place almost never satisfied with chip brands directly. “But we have now,” he mentioned.

The suppliers agreed that they require deeper associations with the automobile makers. “What it demands is strategic interactions all the way down the chain,” stated Aptiv’s Clark. It will just take, he continued, “co-investment decision not just from a dollars standpoint, but from a romance standpoint.”

What may that imply for chip manufacturers like GlobalFoundries? According to GlobalFoundries senior vice president Mike Hogan, car maker involvement could lead to quicker introduction of new chip technologies. For example, the first variation of new tech could be intended to fulfill auto market criteria somewhat than today’s model, where by tech developed for other industries are adapted to auto makers’ demands.

This reimagining of the source chain is going on as the motor vehicle industry confronts big modifications. “If you glimpse at the place we’re heading from a engineering standpoint, we will advance far more in the upcoming 10 years than we will have in the final hundred,” Jennings mentioned.

The transfer to battery electric powered autos provides a major chance to simplify the way the digital techniques in automobiles are created. With present interior combustion vehicles, these electronics have been layered on as new technologies were designed and deployed top to a large amount of complexity in both hardware and software, points out Hogan. (For a deep dive into just how complicated the software package problem has gotten, read through “How Software program Is Eating the Automobile.”)

Battery electric powered redesigns offer “a true prospect to rethink how a motor vehicle is architected,” mentioned Aptiv’s Clark. But for the supply chain to function proficiently, he thinks suppliers require to participate in that rearchitecting.

How extended will it choose just before this desire provide chain emerges? It will probable be the function of yrs, executives say.

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