Volkswagen Cooperates With STMicroelectronics To Develop New Chip

Today's VW cars need more chips. (photo: twitter @volkswagen)

JAKARTA - Germany's Volkswagen on Wednesday, July 20, said it had teamed up with French-Italian chipmaker STMicroelectronics to develop new semiconductors amid the global microchip crisis. The crisis has weighed on the auto industry's supply chain.

The move illustrates how Volkswagen, as Europe's largest automaker, is trying to gain more control over chip supply. The reason is now the chip is needed even more in number in the new generation of vehicles and low carbon emissions.

This is Volkswagen's first direct relationship with a second- and third-ranked semiconductor supplier. It is also a move that executives have hinted at since chip shortages hit the auto industry in late 2019.

Volkswagen's software unit Cariad said in May that it would also use Qualcomm's system-on-chip for autonomous driving systems up to Level 4 standards. At this level the car can handle all aspects of driving in most circumstances without human intervention.

"The new agreement will not affect this partnership," said a spokesperson for Cariad, as quoted by Reuters.

Neither party disclosed the financial implications of the deal, which makes STMicroelectronics one of Volkswagen's top technology partners.

Cariad and STMicro will co-design the new chip, which will be part of the Stellar family of semiconductor microcontrollers. The two companies are "moving to agree" that Taiwan Semiconductor Manufacturing Company (TSMC) will manufacture it, the statement said.

"With the planned direct cooperation with ST and TSMC, we are actively shaping our entire semiconductor supply chain," said Murat Aksel, Volkswagen's head of purchasing. "We are ensuring the production of the right chips we need for our cars and securing a critical supply of microchips for years to come."

A global shortage of semiconductors has left car manufacturers around the world unable to deliver their orders in a timely manner, clogging production for months with no clear end in sight.