Electronics: Automakers try to solve the chip crunch
Detroit’s biggest automakers want to become chipmakers, said Neal Boudette and Don Clark in The New York Times. Now more than a year into a global semiconductor shortage that has caused gridlock in the automotive industry, Ford and General Motors announced steps to boost their domestic supplies. Ford last week said it will partner with a New York– based producer, GlobalFoundries, to “develop chips specifically for Ford vehicles.” General Motors reached a deal last month with another chipmaker building a factory in upstate New York, and said it is working on its own designs to reduce the variety of microprocessors. But GM said it expects automotive chip demand will “double over the next few years” as manufacturers add “increasingly complex features, such as battery monitoring” and better safety systems. “Computing power is the new horsepower,” said Chuck Gray, a vice president at Ford.
Some car models have been forced to power down their cool new tech, said Sebastian Blanco in CarAndDriver.com. Several models of the 2022 BMW will be without a touch screen, for instance. Most of the new “GM sport-utility vehicles will lose their heated and ventilated seats.” Ford’s partnership with GlobalFoundries probably won’t do much to alleviate the current bottleneck, said Stephen Wilmot and Dan Gallagher in The Wall Street Journal.
We need more manufacturing capacity for that, and it will “take time to ramp up.” But longer term, automakers are smart to want to have a hand in chip design, given “the growth of electric vehicles and the software required to operate them.” Of course, Tesla already gets this—it began “working on blueprints for bespoke semiconductors in 2016.”
Some states are “starting to see a silver lining” in the crisis, said David McCabe in The New York Times. The U.S. currently controls just 12 percent of global chip production. But some lawmakers believe that the supply chain struggles could spark a domestic chip-making boom. Cities in Arizona, New York, and Texas are bidding to land a $17 billion chip-fabrication plant from Samsung. The Senate passed a $52 billion bill aimed at encouraging more construction of chip factories in the U.S., though the legislation has been held up in the House. Nobody saw this coming, said Will Knight in Wired.com. In 2019, “worldwide chip sales actually fell by 12 percent” from the year earlier. But between August 2020 and August 2021, global sales of semiconductors skyrocketed 30 percent. “Simple components,” like microcontrollers and sensors, have become “a key pinch point” for manufacturers. They’re relatively uncomplicated to make, “but they’re in just about every electronic product, from microwaves to toys.”