Here’s one mistake NXP won’t make again

Paul van Gerven
Leestijd: 4 minuten

NXP failed to anticipate how strongly demand for its automotive chips would grow, but it won’t make that mistake again.

These days, NXP CEO Kurt Sievers is doing something that not so long ago didn’t seem necessary: talking to car manufacturers directly. Previously, his customers, the so-called tier-1 suppliers that build modules out of chips, would take care of that. After all, they’re the ones who need to make sure that car companies get their electronics, just in time of course. It’s NXP’s job to provide the chips, many of which are manufactured at foundries. Interactions within this supply chain were generally limited to one level up or down.

As we’ve seen over the past year, car manufacturers have been paying a high price for this compartmentalization. A shortage of manufacturing capacity at the beginning of the supply chain – at the foundries – has been throwing a wrench in car production, causing tens of billions of dollars in revenue losses worldwide. Had the car companies been paying closer attention to the intricacies of the semiconductor industry, things might not have gotten so bad.

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