On June 24, automotive parts supplier Continental announced the establishment of a new business unit dedicated to semiconductors, marking a significant step into in-house chip development. To address the growing strategic demand for semiconductors in the automotive industry, Continental has entered into a deep collaboration with GlobalFoundries to design its own automotive chips, and has simultaneously launched its new Advanced Electronics and Semiconductors Solutions (AESS) division.
The newly formed AESS division will focus on designing and testing customized chips specifically for Aumovio, Continental’s automotive subsidiary set to operate independently starting September 2025. These chips will be highly optimized and tailored for Aumovio’s future electronic systems and automotive technologies, aiming to meet the stringent performance and integration requirements of the software-defined vehicle era.
AESS will operate under a fabless model—concentrating on chip design and intellectual property development, while manufacturing will be handled exclusively by GlobalFoundries.
Notably, Continental also plans to spin off Aumovio’s automotive division as an independent company in September 2025. As part of this move, Continental has signed an agreement with Mutares SE & Co. KGaA, a private equity firm focused on special situations, under which Mutares will acquire Continental’s drum brake production and R&D facility in Cairo Montenotte, Italy. The transaction includes the transfer of all employees and operations at the site to Mutares.
The automotive chip market is undergoing profound transformation driven by multiple factors, with both supply-demand dynamics and technologies evolving rapidly. Firstly, the accelerated adoption of electrification and intelligent technologies serves as the primary driving force. Secondly, supply chain resilience has become a strategic priority for automakers. Thirdly, the rise of software-defined vehicles is reshaping the electronic and electrical architecture of automobiles, thereby imposing new requirements on chips.
Against this backdrop, while demand for high-end chips remains strong, manufacturers’ development is shifting toward more advanced process nodes, such as 7nm and below. On the supply chain front, an increasing number of automakers are collaborating directly with semiconductor companies or exploring in-house design of core chips to gain greater control over their supply chains and mitigate the impacts of geopolitical and market volatility. To navigate this complex landscape, both semiconductor manufacturers and automakers are making more precise plans for capacity and R&D investments.
