Semiconductor and Auto Groups Team up to Address Supply Chain Demands

July 06, 2021 by Shannon Cuthrell

A semiconductor trade association and an automotive industry think tank team up for a supply chain partnership.

SEMI, a trade association representing some of the top players in the semiconductor market, is teaming up with the Center for Automotive Research, an automotive industry think tank, on a project to link up supply chain activities between the two sectors. 

According to the announcement, the two groups signed a memorandum of understanding to “connect microelectronics manufacturing and design stakeholders with the automotive and mobility ecosystems through programs and events that advance both industries.”

SEMI already has a Smart Mobility Initiative to connect automotive manufacturers and suppliers with device and equipment manufacturers, designers, R&D institutions and materials providers to improve the global automotive electronics supply chain. It also aims to identify shared objectives, challenges and opportunities, create new requirements and standards for autonomous driving, and collaborate on regulatory developments and public policy. 

SEMI’s Smart Mobility Initiative ecosystem engages industry-leading carmakers and power electronics suppliers. Image courtesy of SEMI

SEMI Americas President Dave Anderson said the agreement provides greater influence and visibility to vehicle OEMs in the global supply chain. The organization’s 2,400-plus members stand to benefit from the cross-industry partnerships across electronics design and manufacturing.

Center for Automotive Research President and CEO Carla Bailo further commented that the memorandum of understanding marks the “first step toward cultivating strategic partnerships between automotive OEMs, Tier 1 suppliers and semiconductor suppliers.”

Bailo added, “As automotive technology evolves, the industry will become more semiconductor-intensive—advanced safety features, electric vehicles, powertrain controls, automated driving, telematics, and infotainment all drive rapidly increasing auto chip demand.” 

Underpinning the new alliance is the ongoing global chip shortage, which continues to threaten the auto market’s otherwise remarkable recovery through the COVID-19 pandemic. But despite chip shortages, many auto manufacturers reported sales gains of well over 100% in April due to pent-up demand, though that momentum started to curtail in May. 

Meanwhile, demand for electric vehicles remains ever-elevated following a record year. Even in the pandemic, global electric car sales skyrocketed by more than 40% from 2019 to 2020, according to the International Energy Agency. 

The chip shortage poses significant hurdles to that growth—particularly in the U.S., where the issue is compounded by the lack of a resilient domestic supply base to weather peak demand. 

Recently, semiconductor giants and auto industry groups alike have been lobbying the federal government to address the shortage by providing more funding to expand U.S. microchip production.