Shiv Tasker

In 2021, automotive original equipment manufacturers (OEMs) lost more than $210 billion in sales due to the chip shortage and other supply chain disruptions that reduced production by 11 million vehicles. Lost production over the next several years is anticipated to be marginally better: 7 million vehicles in 2022 and 1.6 million in 2023.

The silver lining? These last few years have given automotive OEMs and their semiconductor suppliers an unparalleled opportunity to learn from their supply chain weaknesses and take steps to avoid – or at least mitigate – the impacts in the future.  However, this is much easier said than done.

To understand why this poses such a unique challenge, it’s helpful to recall how the automotive chip supply chain has worked until now.  Most of the automotive chips in production today are based on older process nodes, such as 40, 65, or 180 nanometers (nm), for which manufacturing capacity is fixed.

In early 2020, when auto OEMs started canceling chip orders based on an anticipated slump in vehicle sales, that manufacturing capacity was reallocated to other industries, which were clamoring to meet new, unexpected demand. When OEMs returned just months later to reactivate their orders, a lack of capacity sent them to the end of the line to wait months or even years for new chip supply, or to find “creative” alternatives.

Related:NXP’s New Real-Time Processors Consolidate Crucial Automotive Functions

Why aren’t manufacturers just building more capacity? Until recent announcements, new fabs were only built to manufacture newer process technologies; and new manufacturing capacity – at any node – takes three to four years to build and deploy. So, even though chip suppliers were already feeling the shortage by mid-2020, adding old-node capacity at existing fabs or building more old-node fabs were not short-term solutions since neither could begin producing chips until sometime in 2023 — at best.

Another alternative for automotive chip suppliers is to migrate their most business-critical designs to other process nodes where capacity is available, such as 28 or 16nm, a task that can take as little as 6-to-12 months from port to validation. For some chip supply situations, this could provide a faster and considerably cheaper solution than waiting for capacity, but for automotive-grade chips, migration is more complicated and time consuming.

The target process, as well as the design and verification workflows must be automotive qualified, limiting the choice of nodes and manufacturers. New automotive chips must also pass rigorous certifications such as ASIL D, ISO 26262 and AEC-Q100.  This makes a one-off migration for most automotive chips an impractical solution to short-term capacity problems.

Related:Tester Inspects Chips to Spot Counterfeits

Multi-sourcing best practices

For process migration to be an effective solution for automotive chip shortages, suppliers need to establish a second- or multi-sourcing plan when the original chip is designed. The plan would identify one or more approved alternative, automotive-qualified migration paths that could be leveraged in the event primary supply is disrupted. This would enable a more seamless shift to production at another node or fab when manufacturing capacity at their primary process node becomes unavailable.

The semiconductor industry is a mature, highly cost-optimized business, and establishing a multi-sourcing plan adds cost.  But given the current landscape, adding multi-sourcing preparation to their best practices can be thought of as an insurance policy, a highly effective strategy for risk mitigation, no matter the cause.

Process migration basics

Process migration itself is quite complex, involving mapping a chip’s logical design to a physical design that is different from the original, then validating that the new chip performs in compliance with the original. The key to success is having an established migration framework that includes evaluating the feasibility of the port, clearly defining a plan of action with expected technical and business outcomes, design implementation (migration), and validation.

Predicting the location, type, or impact of the next supply chain disruption is nearly impossible.  For automotive chip designers, incorporating multi-sourcing strategies into their best practices will help them be prepared to act quickly to reduce the impacts of supply chain disruption and keep their products flowing to customers.