When the Chip Shortage Turns Into a Permanent Car‑Company Habit
It’s not the end of the world, but it’s not exactly the last mile of the century either. For the past two years, a global shortage of semiconductor chips forced car makers to stop millions of vehicles from being built. Today, the crisis is cooling down, yet it’s left a lasting imprint on the industry.
From “War Rooms” to “War Work”
- Previously, execs would set up emergency “war rooms” to juggle chip supplies on a daily basis.
- Now, these war‑room mindsets have become routine parts of car‑design cycles. Instead of reacting, automakers are actively turning into silicon strategists.
New Roles: From Designers to Negotiators
Companies like General Motors, Volkswagen, and Ford have created specialized teams that talk directly to chip manufacturers. These teams are willing to:
- Hold longer order commitments
- Stock larger inventories of chips
- Co‑design chips with producers like Robert Bosch and Denso
Indeed, GM and Stellantis have openly said they’ll sit down with chip designers to co‑create components – a debt‑free partnership that feels more like a DJ collaboration than a commodity swap.
Costs Are Up But So Is Control
Bottom line? It’s more expensive for automakers, because they’re investing in:
- Capital for chip production
- Direct involvement in semiconductor design
- Higher inventory levels to buffer against supply hiccups
But they also gain better visibility into their silicon sources, a trade‑off that some executives and analysts deem worth the extra dollar (or two) each time a young quad‑core ship lands at a dealership.
A Flip‑Flop for the Auto World
Gone are the days when automakers simply leaned on suppliers to pull the right chips. Today’s players are making the chips themselves or at least looking after a front row seat at chip‑fabrication plants. The industry is now a bit like a paint‑by‑numbers set: you own the paint, you know the colors, and you’re the one who decides where the strokes go.
Chip Makers: A Far‑Reaching Reset
The move to a closer partnership is a welcome shift for chip makers. “We’re getting the truth from the people who make cars, and they’re finally understanding that they’re not just buying—they’re building in partnership,” a semiconductor executive commented. The partnership also forces the automotive side to acknowledge the full complexity of the semiconductor supply chain.
After the Crash, A New Road Ahead
At a time when the auto industry believes it has survived the worst of the crisis, the 13 million‑vehicle production loss that began in 2021 feels like a heavy but necessary price tag. The new model is slower and pricier, but it offers the craftier approach of owning your own silicon destiny. For many, this is the brew that finally tastes right after a long run of ignorance.
They never called
When the Auto World Got Groggy: How Chip Makers Became the New Phone BFFs
Ever seen a dilemma flip into an instantable crisis? C.C. Wei, the big boss at Taiwan Semiconductor Manufacturing Co. (TSMC), just shared a laugh‑filled moment at a recent Silicon Valley meet‑up. “Now it’s day‑to‑day calls, like being someone’s best friend,” he quipped. In the past two years, car manufacturers finally texted him because the chip shortage hit them right in the tank.
- 25 Wafers Gone Wild – An auto titan called for 25 wafers, while Wei usually handles 25,000. “You can see why the big players were left high‑and‑dry.”
Rise of the Car‑Chip Own‑Shes
Thomas Caulfield, the head honcho at GlobalFoundries, reminded the crowd that the car industry can’t keep leaving the safety net game to the chip makers. “You can’t have one sector carrying the water for the whole squad,” he told Reuters.
- Customers must own the capacity they need and commit to it.
- Ford is already tying up with GlobalFoundries to lock in a steady stream of chips.
- More automakers are lining up; Mike Hogan (GlobalFoundries’ android chief) is pitching similar deals.
Skywater’s “Skin in the Game” Plan
From the heartland of Minnesota, SkyWater Technology is touching base with carmakers. CEO Thomas Sonderman told Reuters that they’ll eye a future where the automakers buy equipment or help research the next big chip breakthrough. “It’s about getting skin in the game,” he said.
Onsemi’s Silicon-Carbide Boom
- Thanks to a close binge with automakers and suppliers, onsemi secured $4 billion in long‑term deals for silicon‑carbide power‑management chips—tiny wonders that are booming.
- Chief Executive Hassane El‑Khoury says they’re putting billions into scaling that tech. “We’re not building things on hope.”
Touch‑Screen Talk: Synaptics and the Auto Craze
With Michael Hurlston at the helm of Synaptics, the company—known for the chips in our phone screens—has now shifted its focus to automotive touch panels. Apparently, the car world finally embraced OLED screens. “OLED’s a better contrast, less power, but they’re just as tough as we told the industry,” Hurlston said. “The illusion of fragility cracked after two years of talk.”
Smart‑Cars on the Horizon
Renesas from Japan and NXP from the Netherlands are now putting their engineers in the field to coax automakers into building a new architecture. One computer, one boss-level controller for all vehicle functions. NXP’s Kurt Sievers summed it up: “They finally woke up. They’re hunting the right talent. It’s a major shift.”
So if you thought the auto world was all metal and engine noise, the truth is — it’s humming with unprecedented partnership vibes, deeper commitments, and the next wave of chip innovations waiting to rev into reality.
‘We have understood’
Chip Quagmire: Automakers Feeling the Silicon Pressure
Gartner’s latest buzz‑feed tells us that by 2026 the average semiconductor spend in a car will top $1,000. That’s a two‑fold jump from the first year of the pandemic, and the numbers are getting even wilder when we look at the luxury scene.
From Porsche to Vauxhall: The Chip Parade
- Take the Porsche Taycan – it’s already packed with over 8,000 chips. Sounds like a tiny computer, doesn’t it?
- Volkswagen’s forecast is even crazier: that count should double or triple by decade‑end.
Berthold Hellenthal, a senior manager at Volkswagen Group who’s now dedicated to “strategic semiconductor management,” quips that the automakers are practically “joining the semiconductor party.” He’s not joking, his team’s full‑time focus on the silicon game is real.
Recruiting the Golden Silicon Wizards
Automakers are hunting for chip talent like it’s a lost treasure. But they’re up against tech giants – Google, Amazon, Apple – that can pull the same engineers into their own shiny domains. “This could lead to acquisitions,” says Evangelos Simoudis, a Silicon Valley VC who circles both big auto brands and budding startups.
Unlike Tesla, which designs its own core chips, traditional car makers have to juggle legacy production while pouring money into new silicon ventures. The resulting tug‑of‑war comes at a cost: the animation of the automotive industry has seen more than 13 million vehicles cut from production plans worldwide since early 2021, according to AutoForecast Solutions (AFS).
Industry’s Big Truth
Sam Fiorani, AFS’s VP of global vehicle forecasting, calls the sector “arrogant.” He hints that while the brand may feel unstoppable, the “rear‑end bite” from chip shortages is a stark reality check.
Meanwhile, the world of Taiwanese chip manufacturing doesn’t look to be hitting its stride alone, hinting that even the biggest players might hold off a bit.
