Continental launches semiconductor unit, partners with GlobalFoundries

AESS will operate as a fabless semiconductor organisation, with GlobalFoundries (GF) selected as its manufacturing partner. The move is aimed at strengthening Continental's position in the increasingly semiconductor-driven automotive sector, while improving supply chain resilience and reducing exposure to geopolitical risks.

“To ensure future success of the group sector, we have decided to develop semiconductors internally. The creation of this fabless semiconductor organisation will strengthen Continental’s position not only by reducing geopolitical risks but also by the way of becoming more self-reliant in this field,” says Philipp von Hirschheydt, member of the Continental Executive Board and CEO of the future Aumovio, in a press release.

AESS will design and verify semiconductors internally while the production line will be established with GF to exclusively manufacture these semiconductors for the organisation. The global automotive semiconductor market is projected to reach USD 110 billion by 2032, prompting major automotive suppliers to invest in their own chip design capabilities.

“GF is proud to support Continental and the launch of their AESS organization as we partner together to deliver advanced semiconductor solutions to meet the growing demand for software-defined vehicles,” says Niels Anderskouv, president and chief operating officer at GF.

According to Continental, the establishment of AESS aligns with the Automotive Board’s long-term strategy to invest in technology and increase self-sufficiency. AESS will contribute to improved product quality, a more resilient supply chain, and reduce time-to-market. The unit is also expected to generate cost efficiencies and enhance cash flow.