Volkswagen Feat STMicro to Build a New Semiconductor Although Chip Shortage

Volkswagen Germany and STMicroelectronics of France will collaborate on the development of a new semiconductor amid a global microprocessor shortage that has stressed the automotive industry's supply chain. 

The plan demonstrates how Volkswagen, Europe's largest automaker, is attempting to obtain greater control over the supply of semiconductors, which are increasingly being used in next generation and low carbon emission vehicles.

It is Volkswagen's first direct engagement with second- and third-tier semiconductor vendors, a move executive have hinted at since the car industry's chip shortfall in late 2019.

Cariad, a Volkswagen software company, said in May that it will also source Qualcomm system-on-chips for Level 4 autonomous driving, in which the car can manage all elements of driving in most conditions without human involvement.

"We are actively structuring our whole semiconductor supply chain with the anticipated direct cooperation with ST and TSMC," commented Volkswagen's Purchasing Chief, Murat Aksel. 

The global semiconductor scarcity has rendered automakers around the world unable to service record-high order books, with incomplete vehicles filling up warehouses for months and no end in sight.

According to a Cariad representative, the new agreement of both businesses are "working to agree" that Taiwan Semiconductor Manufacturing Company (TSMC) (2330.TW) will produce it has no impact on this collaboration.

The financial details of the arrangement, which makes STMicroelectronics one of Volkswagen's top technological partners, were not disclosed.

Cariad and STMicro have announced that they would collaborate on the new chip, which will be part of the Stellar microcontroller family of semiconductors.