German automakers Volkswagen and STMicroelectronics said on Wednesday (20th) that the two companies will jointly develop new chips, which will be produced by TSMC (2330-TW). The move shows that Volkswagen intends to take greater control of chip supply as the chips are used in new-generation and low-carbon vehicles.
This is the first time Volkswagen has directly cooperated with a semiconductor design and foundry manufacturing company, but since the chip shortage hit the auto manufacturing industry at the end of 2019, Volkswagen executives have frequently hinted at this move.
However, Volkswagen’s software company Cariad only announced in May that it had selected Qualcomm’s (QCOM-US) own software platform to provide a system-on-chip (SoC) for assisted driving and up to Level 4 autonomous driving functions. A Cariad spokesman said the new agreement with ST will not affect the partnership. So far, the companies have not disclosed the financial impact of the deal.
Cariad and STMicroelectronics said in a statement that they will co-design the new chip, which will be part of the Stellar family of automotive-grade microcontroller (MCU) semiconductors. The statement also mentioned that both companies have agreed to hand over the chips to TSMC for manufacturing.
Murat Aksel, head of purchasing for Volkswagen, said that through the direct cooperation with STMicroelectronics and TSMC in the plan, the company is actively building the entire semiconductor supply chain. Aksel said: “We are securing the required automotive chips and securing the critical MCU supply for the next few years.
Before the deadline, TSMC ADR (TSM-US) rose 0.1% intraday to a tentative report of $86.27 per share; Qualcomm rose 2.74% to a tentative report of $151.40 per share.