Stellantis Doubles Down on Chip Supply

Despite a recent report that the semiconductor supply crisis is behind the automotive industry, automaker Stellantis has made plans to secure adequate supply for production.

An S&P Global Mobility report last week found that though chip supply is still constricted due to lingering pandemic-related constraints, predictability has returned to the semiconductor supply chain and production losses have significantly dwindled.

Stellantis, maker of Jeep, Dodge and other brands, though, announced a new semiconductor strategy designed to secure needed supply for its manufacturing operations. It said it’s signed contracts with suppliers with a purchasing value of more than $11 billion to take it through 2030.

The company said it sees the industry’s demand for semiconductors accelerating, and a Stellantis executive who manages its semiconductor purchasing told Bloomberg that the specter of another severe chip shortage “will increase dramatically” due to rising vehicle software needs.

Stellantis said it’s developed a “robust” strategy to prepare for that possibility, including regular risk assessment, long-range chip forecasting, and buying “mission-critical” parts from chipmakers, including long-term supply.

“We have hundreds of very different semiconductors in our cars. We have built a comprehensive ecosystem to mitigate the risk that one missing chip can stop our lines,” said Chief Purchasing and Supply Chain Officer Maxime Picat in a statement about the strategy.

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