- Currently, automobile industry is holding 5th rank among the major buyers with an international procurement volume for semiconductors of around $47 billion (Rs 387,609 crore)
- By 2030, the automotive industry is expected to secure 3rd place with a market volume of around $147 billion (Rs 1,212,309 crore)
The Germany based global car-maker, Volkswagen Group has now formed a new strategy in terms of procurement of semiconductors and important electronic components/parts so that its supply never falls short in the coming years. Hence, in an effort to meet the same, the company is trying to be a leader in technology and wins the rat-race in the global car manufacturing ecosystem.
Previously, the situation was a bit different because electronic components such as control units were procured and the Tier 1 suppliers were free to take the decision which parts they used. Now, in the coming years, while associating with the Tier 1 suppliers, Volkswagen will decide which electronic components and semiconductors are to be utilized. Automobile experts have highlighted why semiconductors are crucial in this industry. This is because they are not only imperative for mass production, but are also important for unleashing new products in the market.
According to a report of the Indian Express, Dirk Grobe-Loheide, Board Member for Procurement of Volkswagen Passenger Cars and member of Group management said, “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.”
“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," added Dirk.
Global automobile manufacturers have also defined that the role of semiconductors has escalated in this industry because of the fact that demand for electric vehicles have increased and the trend is shifting towards autonomous driving. Basically, the innovations in the automobile industry are defined by the utilization of semiconductors. Now, going by the history, back in 1978, around 8 semiconductors were used in the control unit of Porsche 911. Now, a Skoda Enyag is furnished with 90 control units and 8,000 electronic components.
The modernization and development of the automotive industry has also increased the importance of electronic components in a car. The Volkswagen Group has analyzed the role of semiconductors in detail. It stated that the sector is currently holding the 5th rank among the major buyers with an international procurement volume for semiconductors of around $47 billion (Rs 387,609 crore). By 2030, the automotive industry is expected to secure 3rd place with a market volume of around $147 billion (Rs 1,212,309 crore), reported by the Indian Express.