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Volkswagen Group Faces Chip Shortage With Special Committee



The Volkswagen Group expects the automotive chip business to be about three times larger than it is today by 2030, so the group is taking precautions to mitigate the negative impact of any future shortages. For example, Volkswagen itself will buy chips directly from the manufacturers, instead of leaving them to external producers who make parts for Volkswagen. With this, the group follows the example of Stellantis, among others.

From ‘ the chip shortage is decreasing ‘, to ‘ the chip shortage will soon no longer be an issue ‘ and again to ‘ threat of chip shortage far from gone ‘: the shortage of semiconductors – or chips – has been keeping the car industry busy for about three years now. And although the problems are less than they were, new difficulties are lurking. That is not very surprising: the number of chips in cars is still increasing rapidly and in the coming years, when more electric cars with more software-controlled components go into production, the demand for chips will increase considerably. According to Volkswagen, the automotive chip business is now worth about $50 billion a year, and by 2030 it will be close to $150 billion.

So many more chips – and it remains to be seen whether the chip industry can keep up with the growing demand. In Germany, among others, new chip factories are being built, also thanks to a subsidy, to meet the high demand. New chip factories – and new chips by definition – are quite complex, which means that production capacity cannot simply be planned and realized. It could therefore just be that the size of the chip shortage will increase again at a certain point.

That is why car manufacturers are taking measures and so is Volkswagen, following a good example of Stellantis. That group already announced last month that it will from now on buy chips directly from chip manufacturers, in order to have a better grip on stocks and supply. The Volkswagen Group will now do the same. Some time ago, the group even set up a separate branch (the Semiconductor Sourcing Committee, SCC) that tries to secure the supply of chips for the entire group (!)

The SCC buys chips directly from no less than ten products, in order to distribute them itself among the manufacturers who produce parts for Volkswagen. Previously, those manufacturers usually provided the chip supply themselves, but that brings too many uncertainties for the near future, Volkswagen must have thought. It is one of the possible ways to cope with the chip shortage, just like designing different parts that all use the same type of chips or parts that can be made with different types of chips.

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