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Stellantis Forms New Partnership for Semiconductor Chip Production

Written By, Jordan R

When Stellantis was first formed, many people were wondering what was to come from the new, fourth-largest automotive group in the industry. A merger of Fiat Chrysler Automobiles (FCA) and PSA Group, neither group had much development in terms of alternative fuel vehicles – plug-in hybrids, electric vehicles (EVs), and battery-electric vehicles (BEVs). Shortly after the merger, new CEO Carlos Tavares put the heat on the lineup, threatening to axe those that wouldn’t make the shift to electrified vehicles or couldn’t profit from them. Just last week, we learned that making EVs were never the first choice for Stellantis, as we can plainly see in the years leading up to the merger for each separate entity. Just now entering the market for EVs will be a hurdle to get over for Stellantis, but at the moment, many automakers are struggling due to the semiconductor chip shortage. Several automakers are working towards making their own, and Stellantis recently joined through a new partnership with Hon Hai Technology Group.

The semiconductor chip shortage is a huge problem in the auto industry. Called the fallout of the pandemic, when people started going into quarantine and cities locked down, consumers weren’t driving cars or going outside – they were finding ways to keep sane. That meant using consumer goods, like electronics, and the demand for electronic goods skyrocketed. Because the focus was no longer on automobiles, many suppliers of semiconductors shifted production towards consumer goods. Now that automakers are up and running again, many are finding that they have to cut out features or models altogether while trying to get their supply of chips.

It’s currently a battle with suppliers of semiconductor chips, thinking automakers are stuck in the past and rely too much on old systems. Over the years, the devices that used semiconductor chips have become outdated, smaller, more refined, and chips are being used for those devices. Even with automobiles trying to keep up with the times, they tend to get technology years later, so they still need these old devices and the amount of chips needed to operate them. That’s where this new non-binding memorandum between Stellantis and Hon Hai Technology Group comes in. The partnership has one purpose – design purpose-built semiconductors to support Stellantis and third-party customers.

“Our software-defined transformation will be powered by great partners across industries and expertise…With Foxconn, we aim to create four new families of chips that will cover over 80% of our semiconductor needs, helping to significantly modernize our components, reduce complexity, and simplify the supply chain. This will also boost our ability to innovate faster and build products and services at a rapid pace.” - Carlos Tavares, Stellantis CEO

Foxconn is another group Stellantis has previously partnered with. Stellantis has three focuses – autonomous self-driving vehicles, EVs and BEVs, and car connectivity. Not only is Foxconn the largest developer that uses semiconductor chips, but 40-percent of all consumer electronics in the world are manufactured by Foxconn. Basically, it’s like having a chip supplier in your own backyard. With Foxconn and the Hon Hai Technology Group, Stellantis will be working towards the perfection of a system unveiled at the Stellantis Software Day 2021 event (December 7, 2021).

Called the STLA Brain, this is a new electrical/electronic and software architecture that will be launched across many Stellantis’ four battery electric vehicle-centric platforms in 2024. Flexible and able to be used on a variety of new EV platforms - STLA Small, Medium, Large, and Frame – the automotive group has a chance to enter the EV market with a strong right hook. Moreover, 2024 is going to be a big year for Stellantis, with many big names planning to release their first all-electric vehicle, such as the electric Ram ProMaster, all-electric Jeep Wrangler, and the first-ever Dodge eMuscle.

Partnering up with a supplier or producing your own semiconductor chips seems to be the way to go for many names in the industry. Chips are a big part of all the fancy new tech in vehicles today, and that goes double for EVs. Stellantis may not be thrilled about alternative fuel, but the industry and market are making the shift. Having Foxconn in their corner and now Hon Hai Technology Group are a big win. Follow along with us on NowCar social media to see what Stellantis will do next.

Photo Source/Copyright: Stellantis