BMW signs agreement with chip suppliers to secure semiconductors

As the global semiconductor shortage looms over the automobile industry, many automakers are getting into partnerships with chip suppliers to ensure a hassle-free supply of semiconductors. After Stellantis, BMW is the next. To secure chip supplies, the Bavarian automaker has signed a direct supply assurance agreement with high-tech microchip developer INOVA Semiconductors and GlobalFoundries, a manufacturer of feature-rich semiconductors.

The agreement guarantees BMW supply of millions of microchip per year. The company informed that these microchip will be used in the ISELED smart LED technology co-developed by the company. These chips will be incorporated for the first time in the brand's flagship model, BMW iX SUV. It will also be rolled out in the rest of the models.

Dr Andreas Wendt, a member of the board of management of BMW AG responsible for purchasing and supplier network said the agreement between the companies marks the next logical step for ensuring a steady supply of microchips. “We are deepening our partnership with suppliers at key points in the supplier network and synchronising our capacity planning directly with semiconductor manufacturers and developers. This improves planning reliability and transparency around the volumes needed for everyone involved and secures our needs for the long term," he added.

BMW shared that this agreement will help to build a more resilient supply chain partnership approach to regain a balance in the supply-demand process for chips. It will also push the company towards more innovative technology.

Robert Kraus, CEO of INOVA Semiconductors said that this agreement directly with an OEM certainly is an achievement unlocked as a semiconductor manufacturer. Mike Hogan, senior vice president and general manager of Automotive, Industrial and Multi-market at GlobalFoundries shared is committed to delivering the growing demand for feature-rich chips. “This supply assurance agreement with the BMW Group and INOVA demonstrates how the companies are partnering to develop innovative smart LED technology for the new BMW iX and to develop new technologies for the car of tomorrow," Hogan also stated.