Semiconductor Supply Shortage Strengthens Mutual Dependence Between Auto and Semiconductor Industries

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] The Wall Street Journal (WSJ) reported on the 12th (local time) that cooperation between automobile manufacturers and semiconductor companies is strengthening due to the global semiconductor supply shortage triggered by COVID-19.

According to the report, automobile manufacturers, having experienced semiconductor shortages due to COVID-19, are shifting their semiconductor procurement methods from indirect purchasing to direct purchasing. This means that automobile companies are building closer relationships with semiconductor companies to secure semiconductors.

WSJ pointed out that the significant presence of senior semiconductor industry executives at 'IAA Mobility 2021,' one of the world's four major motor shows held last week in Munich, Germany, exemplifies this change.

At IAA Mobility 2021, many executives from semiconductor companies such as Intel, Qualcomm, and Nvidia attended.

Intel CEO Pat Gelsinger said in a speech on the 7th that automobiles are becoming major customers for semiconductor companies, emphasizing that semiconductor companies need automobiles and automobile companies need semiconductors.

CEO Gelsinger also predicted that the share of automotive-related semiconductors, which was only 4% in 2019, will increase to 20% by 2030.

Qualcomm CEO Cristiano Amon also emphasized, "Ultra-high-speed 5G communication equipment will bring a new era of automobiles such as autonomous driving," and stressed that "automobile companies must establish direct relationships with technology companies."

Qualcomm has established partnerships with Renault and General Motors (GM) and is pursuing the acquisition of Swedish autonomous driving technology company Veoneer for $4.6 billion.

Nvidia is also expecting automobiles to be a new growth engine, planning to invest $8 billion in automotive-related businesses over the next six years.

Market research firm IHS Markit forecasts that the automotive semiconductor market will grow from $52 billion this year to $85 billion by 2027, and expects the interdependent relationship between the automobile and semiconductor industries to become increasingly close over time.

This content was produced with the assistance of AI translation services.