NIO executive calls for automakers, semiconductor providers cooperation

Beijing (Gasgoo)- NIO’s executive, Pan Yu, said at a conference that automakers need to enhance cooperation with local semiconductor providers to prevent the chip shortage from happening again in the future. 

Photo credit: NIO

Pan Yu, the assistant vice president to NIO’s supply chain development sector, addressed the three stages of challenges the automotive chip supply chain underwent. The process started with a misjudgment of the supply and demand balance, causing a slashed production capacity, followed by frequent “black swan” events. Then comes the current stage of the long-term influence brought by the pandemic, resulting in an even greater scissors difference in global semiconductor supply and demand. 

The initial misjudgment was an inevitable result of the information opaqueness among the auto industry chain, from automakers to Tier 1 companies to subcontractors and semiconductor providers. The auto industry needs to transform the “chain” into a “net” for demands to be more transparent, leading the front tier design, providing strategic supports all around, said the executive. 

Pan Yu suggested three directions to improve the situation. Firstly, Chinese semiconductor companies should be more grounded and play to their strengths. For example, the already mature process capability should be given priority to enhance. In terms of mainstream technologies, companies need to focus on the ones that are closest to widely-used international products, making it easy for automakers to deploy. With ample manufacturers domestically, being an alternative supplier is also a feasible option. 

As to the entire industry, the executive proposed to offer local semiconductor suppliers an opportunity by providing an application scenario and opening up the supply chain. Government policies are also helpful for companies to improve business operations and profitability.

Automakers and semiconductor providers should work together to build a virtuous cycle, realizing products and target market iteration based on vehicle users’ real needs. By upgrading user experience, Pan Yu added, both parties will see an increase in sales.