BMW secures millions of semiconductors: response to the chip crisis

The BMW Group signs a direct agreement with chip suppliers to secure long-term semiconductor supply

To secure supplies of the most strategically important components in the upcoming new electrified models, the BMW Group has closed a direct trilateral agreement with high-tech microchip developer Inova Semiconductors, and feature-rich semiconductor manufacturer Globalfoundries. The agreement guarantees the company the supply of several million microchips per year, paving the way for new ways of collaborating with suppliers. The microchips will be used in the Iseled smart LED technology, which will be implemented for the first time in the BMW iX and then further developed for other models.

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bmw and the agreement for microchips

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With deliveries of the first BMW iXs started in November, the German group has closed an important semiconductor supply agreement with Inova Semiconductors and Globalfoundries. A strategically fundamental move to react to the global shortage of semiconductors, which is risking to bring the automotive sector to its knees. Depending on the equipment options, each car contains several thousand essential semiconductors for all electronic devices. And the share of these electronic components in the upcoming new models is set to increase exponentially in the future. “We are deepening our partnership with suppliers in key points of the network, synchronizing our volume planning, directly with those who develop and produce semiconductors” – explains the head of purchasing and the network of suppliers Andreas Wendt, member of the board of management of Bmw AG. “This pioneering agreement paves the way to manage our supplies in an even more balanced and proactive way in the future, improving the reliability and transparency on the scheduling of volumes”.

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bmw vision

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If the so-called “chip shortage” risks compromising the path towards electrification of the automotive sector, affecting the raw materials essential for the functioning of electric cars, new partnerships with the supply chain, such as those initiated by BMW, could represent a turning point, rebalancing the demand and supply of chips. “We believe that this innovative approach to partnership, along the entire production chain, will help us achieve our goals – explains Robert Kraus, CEO of Inova Semiconductors – because in this way, we will be able to guarantee supplies for our end customers and a high planning reliability during long chip production runs. It is a victory for everyone ”. “Globalfoundries is committed to building stronger relationships with the automotive industry to meet the growing demand for feature-rich chips – says Mike Hogan, senior vice president and general manager of Automotive, Industrial and Multi-market at Globalfoundries – and this agreement with BMW and Inova demonstrates how companies are collaborating to develop innovative intelligent LED technology for the new BMW iX, and to develop new technologies for the car of tomorrow ”.

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