Chipmakers to Automakers: Share the Cost

Aug. 5, 2022

Chipmakers want auto industry executives to better understand how the chip supply chain works.

Aug. 4, 2022—Chip makers are pointing the finger at automakers for their lack of understanding of how chips are manufactured and supplied and their unwillingness to share the cost. 

One estimate by AutoForecast Solutions stated that the recent chip crisis cut 13 million vehicles from global production since the start of 2021.

As automakers like General Motors, Volkswagen Group, Ford Motor, Nissan, and others are seeking to negotiate with chip manufacturers, one executive, C.C. Wei, CEO of the world's biggest chipmaker, Taiwan Semiconductor Manufacturing, said auto executives have been courting him now that times are desperate.

Wei, who said he never received a call from an auto industry executive prior to the shortage, told Reuters, "In the past two years they call me and behave like my best friend. One automaker called to urgently request 25 wafers,” said Wei, who is used to fielding orders for 25,000 wafers. "No wonder you cannot get the support."

Other chip makers, like SkyWater Technology, Synaptics, and Japan's Renesas Electronics, and Dutch NXP Semiconductors are all working to offer solutions. 

The average semiconductor content per vehicle will exceed $1,000 by 2026, says one expert. 

About the Author

Ratchet+Wrench Staff Reporters

The Ratchet+Wrench staff reporters have a combined two-plus decades of journalism and mechanical repair experience.

Sponsored Recommendations

Find the right shop management system to boost your efficiency

Find the right shop management system to aid in efficient scheduling, communication and payment processing

Craft a strategic marketing plan

Develop strategies and communicate them to your staff to keep you on track

Establish and track your KPIs: Technician Productivity

WHAT IT IS: Technician productivity refers to the time a technician is available to work measured against the actual time spent working on positive cash flow repair orders. Tracking...

Empower your technicians with the right tools for efficient repairs

Foster a highly motivated and efficient team to get vehicles out the door faster