What’s happening: Until recently, many auto components could easily be controlled by more “generic” electronics. This is no longer the case, as manufacturers add increasingly complex features such as battery monitoring and advanced driver-assistance systems. Now their plan is to design their own hardware, consolidate many of the functions onto custom chips, and work directly with semiconductor manufacturers to ensure supply and quality.
Some background: In recent years, U.S. automakers have hired thousands of software developers and programmers. Ford and GM are now looking to bring on chip designers as well, as they expect the number of chips used in automobiles to double over the next few years.
Automakers have historically relied on an intermediary group of so-called Tier 1 companies that buy chips to design modules to handle particular functions in cars, such as controlling engines and transmissions. This is changing as automakers need more stability in supply, and their differentiation in the market is much more dependent on features controlled by semiconductors.
GM, for example, is now working directly with chip companies to develop three types of microprocessors to handle almost all of its computing needs. These three new microcontroller families will reduce the number of unique chips by as much as 95 percent. This consolidation and robustness in design should help increase chip supply while cutting costs significantly. Suppliers GM is working with to develop this custom silicon include Qualcomm, STM, TSMC, Renesas, ON Semi, NXP, and Infineon.
Ford also signed a nonbinding agreement with GlobalFoundries to collaborate on developing chips for Ford vehicles and expand domestic chip production.
