Continental, a leading automotive parts supplier, has made a significant move into in-house chip development by establishing a new business unit dedicated to semiconductors. This announcement, made on June 24, highlights the company’s commitment to addressing the growing strategic demand for semiconductors in the automotive industry. Continental has partnered with GlobalFoundries to design its own automotive chips and has launched the Advanced Electronics and Semiconductors Solutions (AESS) division to spearhead this initiative.
The AESS division will focus on designing and testing customized chips specifically for Aumovio, Continental’s automotive subsidiary set to operate independently from September 2025. These chips will be tailored to meet the performance and integration requirements of Aumovio’s future electronic systems and automotive technologies in the software-defined vehicle era. Operating under a fabless model, AESS will concentrate on chip design and intellectual property development, while manufacturing will be handled exclusively by GlobalFoundries.
In addition to its semiconductor endeavors, Continental also has plans to spin off Aumovio’s automotive division as an independent company in 2025. As part of this move, the company has entered into an agreement with Mutares SE & Co. KGaA, a private equity firm specializing in special situations. Mutares will acquire Continental’s drum brake production and R&D facility in Cairo Montenotte, Italy, including all employees and operations at the site.
The automotive chip market is experiencing significant transformation due to factors such as the increased adoption of electrification and intelligent technologies, the emphasis on supply chain resilience, and the shift towards software-defined vehicles. As a result, demand for high-end chips remains strong, driving manufacturers towards more advanced process nodes like 7nm and below. Automakers are also increasingly collaborating with semiconductor companies or exploring in-house chip design to enhance supply chain control and mitigate market volatility.
To navigate this evolving landscape, semiconductor manufacturers and automakers are making strategic investments in capacity and R&D. By aligning their plans with the changing dynamics of the automotive chip market, companies like Continental are positioning themselves for success in the software-defined vehicle era.
