A chip shortage arising from the COVID-19 pandemic has slammed global carmakers, forcing them to seek solutions at the same time. As a result, some companies have considered or started designing their own chips to handle the ongoing disruption of auto chip shortage and get ready for the electrification wave in the automotive industry.

Compared with its rivals around the world, Tesla seems to better weather the semiconductor scarcity. The electric vehicle (EV) manufacturer's engineers design more hardware and software than their counterparts, according to Reuters, and are capable of rewriting software to make chips meet their needs.

Tesla has designed and developed microcontrollers, according to Teslarati. Together with firmware for chips, the microcontrollers have substituted chips for different tasks to operate the vehicle.

Moreover, the EV maker's effort in producing its chips can date back to 2016. A Forbes' report said Tesla has used Silicon Carbide (SiC) instead of silicon-only to make chips, cutting down the energy loss and making them more long-lasting.

Self-designed chips have become more common in autonomous driving. According to Wired, Tesla last year released information regarding D1, a custom-designed artificial intelligence chip for training the algorithm of the company's autonomous driving system.

Volkswagen is working toward the same goal. In an interview with German newspaper Handelsblattin in 2021, VW's CEO Herbert Diess said the company will design and develop high-powered chips and software for its self-driving cars.

The German automaker cut at least 100,000 vehicles in overall production last year, according to TechHQ. Diess acknowledged in the interview that Tesla and Apple's competence in defining semiconductors and developing new features inspired VW's plan to design chips on its own.

Carmakers involved in chip design will be more common

The automotive industry is likely to see more car companies begin designing their own chips. The change will enable OEMs to gain control over the products and supply chains.

On its Software Day in early December 2021, Stellantis announced that it has partnered with Foxconn to design and sell a family of purpose-built semiconductors.

According to the company's press release, the partnership aims to help stabilize Stellantis' semiconductor supply and targets product adoption and installation into the carmaker's vehicles by 2024.

"With Foxconn, we aim to create four new families of chips that will cover over 80% of our semiconductor needs, helping to significantly modernize our components, reduce complexity, and simplify the supply chain," Carlos Tavares, Stellantis CEO, said.

Nissan is among those who are considering making chips by itself. According to a few media reporting, Makoto Uchida, Nissan's president and CEO, has said the company may produce certain chips.

The automaker is having conversations with partners, including Renault S.A., about what chips they want to make, who to work with, and the core technology that Nissan has to control.

In November 2021, Ford announced that it has signed a non-binding agreement with GlobalFoundries Inc. to address the chip shortage. According to Ford's press release, the collaboration secures chip supply for the carmaker and creates opportunities for research and development regarding semiconductors. Ford said the move would benefit semiconductor solutions for Advanced Driver Assistance System (ADAS), battery management systems and in-vehicle networking.

The collaboration indicates that Ford will get more involved in chip design.

Similarly, General Motors will co-develop chips with suppliers in the future. According to Bloomberg, Mark Reuss, GM's president, said the company will move to deal with the growing demand for semiconductors that enable more features in the cars.

Reuss said GM will work with Qualcomm, STMicroelectronics, Taiwan Semiconductor Manufacturing, Renesas Electronics, ON Semiconductor, NXP Semiconductors and Infineon Technologies to develop chips.

The US automaker will also decrease the variety of chips it orders so that suppliers would make deliveries easier, Reuss said.

Hyundai is also weighing the option of producing its semiconductors. According to CarBuzz, the South Korean company's global chief operating officer, Jose Munoz, talked about localizing chip production at CES2022, indicating Hyundai's intention to invest in the field.

On the other hand, BMW announced last month that it has concluded a supply assurance agreement directly with microchip developer INOVA Semiconductors and GlobalFoundries.

According to the automaker, the agreement guarantees several million microchips each year. Dr. Andreas Wendt, BMW AG management board member responsible for purchasing and supplier network, said the collaboration improves planning reliability and transparency around the volumes needed for everyone involved and secure BMW's needs for the long term.

Additionally, whether Toyota has found a new way to deal with the chip shortage remains unknown. However, the Japanese carmaker recently topped US sales in 2021, defeating GM for the first time.

By: DocMemory
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