Automobile OEM custom chips and Japanese supply bottlenecks

An International Herald Tribune article (April 27, 2011) describes the impact of the earthquake caused destruction to chip manufacturer Renesas Electronics with a 40 % market share of automobile microcontrollers.  The company was formed by the merger of three chip makers, thus creating one supplier to many auto OEMs.  Each OEM has its own unique chip design, thus making supplier switching more time consuming and expensive.  Will the fragility of their supply base cause more design standardization across auto OEM chips ? Or will the competitive benefit of unique designs trump the supply chain benefits from commonality ? Will common designs also hurt possible OEM influence on repair shops ad preferential value provided by OEM dealers ?

About aviyer2010

Professor
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