Carmaker Volkswagen has taken a new strategy to secure semiconductors. The company said it will purchase strategically important semiconductors directly from manufacturers. The move will help Volkswagen identify and implement technical alternatives more quickly when experiencing shortages.
In an announcement on August 24, Volkswagen said it is reorganizing electronic parts and semiconductors procurement to ensure long-term supply. According to Dirk Grosse-Loheide, Volkswagen Passenger Cars' board member for procurement, for strategically important semiconductors and the Group's planned development in the future, the Group will rely on direct purchasing from semiconductor manufacturers.
Grosse-Loheide said having the exact knowledge of the parts used will enable Volkswagen better to determine the global demand and availability of components.
Reuters reported that Volkswagen has started buying chips directly from 10 semiconductor companies, including NXP, Infineon and Renesas.
Volkswagen said in the past, it procured electronic components like control units from tier-1 suppliers who decide what parts they use. In the future, the carmaker's procurement team will define which semiconductors and other electronic parts are used with tier-1s.
Karsten Schnake, head of Volkswagen's cross-brand task force for parts supply, said a higher degree of transparency in semiconductor sourcing means technical alternatives can be identified and implemented more quickly in case of bottlenecks.
Volkswagen said as more and more semiconductors are used in contemporary vehicles, the value of electronic components per car will increase. Currently, the average value is about EUR600 (US$647) per vehicle. The number is expected to be more than double by 2030.
The automotive industry has become an important customer for the semiconductor sector. According to Volkswagen, the automotive industry is the fifth largest semiconductor buyer worldwide, spending around US$47 billion. By 2030, the spending is expected to rise to US$147 billion.
