Hit by shortage, Volkswagen demands boost to Europe’s chip sector
Europe needs to stump up cash to boost its chip industry, a board member of the continent’s largest carmaker Volkswagen said, pointing to a global semiconductor shortage that has highlighted dependence on foreign players.
“We won’t produce chips ourselves,” Markus Duesmann, Volkswagen’s board member in charge of research & development and head of luxury unit Audi, told Reuters. “But of course we would like to have strong chipmakers that are at least on par with Asia and the United States.”
“Ultimately technology is decisive for the success of the group,” he said, adding Europe should be leading in future technologies, such as software and chips.
One way to achieve this, he said, could be funding programmes modelled after an existing plan to boost Europe’s battery cell technology under a scheme called Important Project of Common European Interest (IPCEI).
Germany on Wednesday said European countries were planning to support the local production of technology hardware, including processors and semiconductors, via an IPCEI, with targeted aid that could result in investments of up to 50 billion euros ($60 billion).
ALSO READ: Branson-backed SPAC to take DNA-testing firm 23andMe public in $3.5 bn deal
However, the exact level of investment and the question of who will foot the bill have not been specified.
Global automakers have been caught off guard by a shortage of crucial semiconductors in the wake of a rapid recovery of the automotive market, highlighting the need to cut dependency on Asian manufacturers.
Volkswagen has doubled its budget for software development, a key area to tackle the challenges of autonomous driving, Duesmann said, adding this was one of the drivers to create the Car.Software.Org unit with 5,000 employees.
The company also owns a 40% stake in Pittsburgh-based self-driving startup Argo AI, with Ford owning an equal share, but Duesmann said pursuing both paths was perfectly in line with the carmaker’s strategy and product portfolio.
“Those are different strands in terms of development and we will continue (to develop) them like that.”
Dear Reader,
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.
Digital Editor
