Volkswagen Group implementing new semiconductor strategies

Volkswagen will work closely with its tier one suppliers to ensure the best strategies for the procurement of electronic parts

The Volkswagen Group is developing a new plan to ensure its long-term future in the electrification of its vehicles, reorganising its approach to the securing of electronic parts and semiconductors.

Volkswagen had previously allowed tier one suppliers, such as manufacturing facilities and production partners, to decide which parts to use in the construction of its electric vehicles. Now however, Volkswagen will directly decide which semiconductors and electric parts will be in their vehicles.

Board member for procurement of Volkswagen passenger cars, Dirk Große-Loheide believes this new approach will allow the company to fulfill its long-term goals and continue to be an industry leader.

“A high degree of transparency in the semiconductor value chain – the exact knowledge of the parts used – enables us to better determine the global demand and availability of these components,” Große-Loheide says.

“This is underscored by risk management which, in future, will extend to the level of individual electronic parts and help us detect bottlenecks early on and avoid them.

“For strategically important semiconductors and even the Group’s own planned developments in the future, we will rely on direct purchasing from the semiconductor manufacturers.”

Semiconductors have become increasingly valuable as more automotive manufacturers turn to the electrification of their vehicles. Some battery electric vehicles (BEVs) can have as many as 8000 electronic components within 90 control units.

The procurement of more closely monitored semiconductors will allow Volkswagen to increase mass production of its BEVs, and also remain in control of their demand.

It comes at a time when the cost of electronic components are expected to almost double in price by 2030 to an average of 1200 euros per vehicle.

Board member for procurement at Skoda Auto, Karsten Schnake says these new strategies will be implemented across all parts of the company.

“Additionally, this is done across all brands by the Semiconductor Sourcing Committee (SSC) established especially for this purpose, with representatives from the procurement and development departments of the brands as well as from Volkswagen Group Components and CARIAD,” Schnake says.

“Furthermore, the transparency regarding semiconductors means that technical alternatives can be identified and implemented more quickly in the event of bottlenecks.”

Send this to a friend