BMW Group assures chip supplies through direct agreement with manufacturers

Parts shortages — of microchips, in particular — have shown to have had a great impact on vehicle production and deliveries, regardless of the brand. That said, the BMW Group has entered a trilateral agreement with high-tech microchip developer INOVA Semiconductors and GlobalFoundries, to secure a long-term supply of feature-rich semiconductors.

“We are deepening our partnership with suppliers at key points in the supplier network and synchronizing our capacity planning directly with semiconductor manufacturers and developers. This improves planning reliability and transparency around the volumes needed for everyone involved and secures our needs for the long term. This pioneering agreement marks the next logical step in securing our supplies in an even more balanced and proactive manner going forward,” said BMW AG Board of Management member and in charge of the Purchasing and Supplier Network Andreas Wendt.

This agreement, said the Group, is an example of the commitment to build a more resilient supply chain partnership approach to regain supply-demand balance for chips in the automotive industry as well as efforts to further accelerate technology innovation.

“This agreement directly with an OEM certainly marks new territory for us as a semiconductor manufacturer. But we firmly believe this innovative approach to partnership throughout the production chain will help us achieve our objectives: In this way, we can secure supplies for our end customers and ensure high planning reliability throughout the long chip production cycles. It’s a real win-win,” commented INOVA Semiconductors CEO Robert Kraus.

Depending on the available equipment options, a car can be fitted with several thousand semiconductors that are essential for its electronic functions. They serve various functions by performing arithmetic and control tasks in computers, storing data, or even handling multiple tasks at the same time. The share of electronic components in vehicles is likely to increase further in the future, said the BMW Group.

“GlobalFoundries is committed to building stronger relationships with the automotive industry to deliver innovation and address the growing demand for feature-rich chips. This supply assurance agreement with the BMW Group and INOVA demonstrates how the companies are partnering to develop innovative smart LED technology for the new BMW iX and to develop new technologies for the car of tomorrow,” said GlobalFoundries SVP and GM of Automotive, Industrial and Multi-market Mike Hogan.

Photo from BMW Group

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