After global chip shortages caused major manufacturing delays, leading auto manufacturers are turning to partnerships to move forward in the semiconductor space.
When the Covid-19 pandemic hit, automakers around the world prepared for the worst. To preserve cash, they halted orders for semiconductors.
But demand rebounded faster than expected. As automakers resumed orders, they were moved to the end of the line in favor of more profitable semiconductor customers. Automakers were not receiving enough semiconductors to meet production capabilities and consumer demand. This resulted in vehicle shortages, costing the auto industry $210B in 2021.
Demand for chips shows no signs of slowing down. The average car currently incorporates up to 3,000 chips for everything from tire pressure sensors to automatic headlights to blind spot monitoring systems — and vehicles are becoming more advanced each year.
Automotive companies have started to think more critically about semiconductors. Earnings call discussions about the tech skyrocketed in 2021.