04 Sep 2023 -

VW revamps semiconductor sourcing strategy for future-proofing

VW automotive

The Volkswagen Group is reorganising its procurement of electronic parts and semiconductors to ensure supply over the long term and to secure itself a leading position in technology as well as competitiveness, reports EETimes.

The German company will now define which semiconductors and other electronic parts are to be used, in close collaboration and partnership with Tier 1 suppliers. This will be done across all brands by the Semiconductor Sourcing Committee (SSC), which has been established especially for this purpose. The SSC will have representatives from the procurement and development departments of the brands as well as from Volkswagen Group Components and Cariad.

The new approach will give the Volkswagen Group greater transparency into the semiconductor value chain and the exact knowledge of the parts used. This will enable the company to better determine the global demand and availability of these components, and to detect bottlenecks early on and avoid them.

For strategically important semiconductors and even the Group’s own planned developments in the future, Volkswagen will rely on direct purchasing from the semiconductor manufacturers. This will give the company more control over the supply chain and help to ensure a secure and reliable supply of semiconductors.

The reorganisation of semiconductor procurement is part of the Volkswagen Group’s Compass initiative, which was launched in early 2022 to address the challenges posed by the semiconductor crisis. The initiative has also identified other strategic action areas, such as increasing the resilience of the supply chain and investing in research and development of new semiconductor technologies.

The Volkswagen Group is a major customer of the semiconductor industry, and the demand for semiconductors is expected to continue to grow in the coming years. The reorganization of semiconductor procurement is a key step for the company to ensure a secure and reliable supply of these essential components.

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