GM Will Co-Develop Chips With Several Producers to Secure Supply

David Welch and Ed Ludlow, Bloomberg News

(Bloomberg) -- General Motors Co. President Mark Reuss said Thursday the company will co-develop semiconductors with several producers to make chips that can handle more electronic features in its vehicles, a revamp of strategy that comes as a shortage of these items continues to roil the global auto industry.

GM currently uses a wide assortment of semiconductors in its cars. It now plans to reduce the types of chips it uses to just three families of semiconductors over the next several years. That would reduce the variety of chips GM orders by 95%, making it easier for producers to fulfill the company’s needs and boosting margins, Reuss said at the Barclays Auto Conference.

Reuss said GM needs to cut down on semiconductor complexity because the rapid increase in high-tech functions in its new models, along with the company’s rapid push into electric vehicles, means the automaker needs a lot more chips.

“We see the semiconductor requirements more than doubling over the next several years as the vehicles we produce become more of a technology platform,” Reuss said.

GM will be working to develop the chips with Qualcomm Inc., STMicroelectronics NV, Taiwan Semiconductor Manufacturing Co., Renasas Electronics Corp., ON Semiconductor Corp., NXP Semiconductors NV and Infineon Technologies AG, Reuss said.

The Detroit automaker last month reported its third-quarter sales fell 33% and profits were almost half what they were a year ago because of lost production due to a lack of chips. Chief Executive Officer Mary Barra said in October that she expects the semiconductor shortage to last into the second half of 2022.

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