Global chip shortage crisis changes auto industry: learn to share costs and risks with chipmakers

Helston said the automotive industry has begun to embrace OLED screens, even though they are not as durable as LCD screens. Previously, despite the better contrast and lower power consumption of OLED screens, durability affected the automotive industry's interest in the technology. "In the last two years, however, their views have changed significantly. This is the result of our direct dialogue with the automotive industry. For us, the industry paradigm has really changed."

The chief executives of Renesas Electronics of Japan and NXP Semiconductors of the Netherlands both said they are arranging for engineers to assist automotive companies in designing new architectures to control all the functions of a car with a single computer. NXP CEO Kurt Sievers (Kurt Sievers) said, "They have awakened. They understand how much it costs. They're starting to try to find the right people. It's a big shift."

According to market research firm Gartner, the average chip content per vehicle will exceed $1,000 by 2026, double that of the first year of the outbreak. The electric Porsche Taycan, for example, currently uses more than 8,000 chips, and the VW Group says that number will double or triple by the end of this decade.

We have understood that we are part of the chip industry ourselves," said Berthold Hellenthal, VW Group's senior manager for chip management. We now have people set up for strategic chip management."

Evangelos Simoudis, a Silicon Valley investor and consultant who has worked with both established automakers and startups, said recruiting and retaining chip engineers will be a challenge for automakers, which will need to compete with tech companies such as Google, Amazon and Apple. "This will lead to acquisitions."

He also noted that unlike Tesla, which designs its own core chips, traditional automakers will have to continue producing traditional models while making new investments.

AutoForecast Solutions estimates that the chip shortage has forced automakers around the world to cut production plans for more than 13 million vehicles since the beginning of 2021. "It's a very arrogant industry," said Sam Fiorani, the company's vice president for global vehicle production forecasting.