US automaker GM to collaborate with chipmakers to improve supply stability

HOUSTON (ICIS)–US automaker General Motors (GM) will work with several semiconductor manufacturers on a new strategy designed to improve the supply of microchips needed for modern vehicles.

GM president Mark Reuss shared the news during a session at the virtual Barclays Auto Conference.

Reuss said GM will work with Qualcomm Inc, STMicroelectronics NV, Taiwan Semiconductor Manufacturing Co, Renasas Electronics Corp, ON Semiconductor Corp, NXP Semiconductors and Infineon Technologies AG.

The strategy involves actually reducing the number of unique microcontroller units, or MCUs, to just three families of semiconductors.

“Those three core microcontrollers are really designed to provide more than seven years of platform stability,” Reuss said. “This is a very unique and very integrated approach getting to three families, really high volume, and we have got a pretty broad platform of companies that will help us execute that strategy.”

This is not the first instance of automakers partnering with the chip manufacturers.

US automaker Ford announced on Thursday an agreement with semiconductor manufacturer GlobalFoundries that will allow the companies to work together to “build and strengthen a collaborative model to accelerate the next wave of innovation in automotive chip design”.

Microchips are used to control the engine, antilock brakes, power steering, fuel-monitoring system and heating and air conditioning in modern vehicles.

The global shortage of semiconductors arose as economies began reopening after lockdown measures to help stop the spread of the coronavirus, and chip producers were unable to keep up with the spike in demand.

The chip shortage, which is likely to last into 2022 despite today’s announcement, has had a drastic impact on auto production and led to reduced inventories on dealer lots and reduced sales of new light vehicles.

The automotive industry is a major global consumer of petrochemicals which contributes more than a third of the raw material costs of an average vehicle, and production disruptions could severely weigh on demand.

The automotive sector drives demand for chemicals such as polypropylene (PP), along with nylon, polystyrene (PS), styrene butadiene rubber (SBR), polyurethanes and methyl methacrylate (MMA)/polymethyl methacrylate (PMMA).

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