THE ON-GOING SHORTAGE OF computer chips is having a dire effect on car production around the world.
So severe has been the impact that car companies are now looking at going into the semiconductor business.
Ford has entered a strategic agreement with US-based semiconductor manufacturer Global-Foundries to develop chips.
And as usual, where Ford goes, GM follows (or vice versa). GM has announced that it is developing ties with some of the biggest names in semiconductors, including Qualcomm and NXP Semiconductors.
The moves are a clear indication that the pandemic is forcing companies to take greater control over their supply chains by moving production closer to home or even moving it in-house.
The automotive industry has for decades been outsourcing key components and recent developments are forcing a rethink.
Ford believes that bringing design and manufacture of chips in-house could lead to improved features, including automated driving capabilities and better battery systems for electric vehicles.
It won’t be easy.
Semiconductor design and manufacture is a serious undertaking and notoriously difficult. Tesla started working on its bespoke semiconductors as early as 2016. Even before the pandemic, semiconductor companies were complaining of an acute shortage of qualified specialists, so Ford will have to compete with traditional semiconductor companies to hire talent.
And the increasingly complex design of in-car tech will see a need for faster and improved chips. GM president Mark Reuss believes semiconductor requirements will more than double over the next few years.
Reducing the number of unique microprocessors is one way to overcome the problems of increasingly complex and tech-laden vehicles, with semiconductors critical for the control of everything from engine calibration to airbag deployment.
Car companies are also concerned that the increasingly rapid move to EVs will lead to shortages in battery supplies and raw materials. As a result, many car companies are teaming with battery companies to build new factories to meet expected demand.