Continental AG Establishes New Division for Semiconductor Circuits

Continental AG, a tire and automotive equipment manufacturer, has established a new unit focused on semiconductor circuits. The new unit will design, manufacture, and market semiconductor circuits, expanding the company's automotive systems portfolio. The move aims to strengthen Continental's position in the rapidly growing automotive electronics market.

June 19, 2025

Continental AG, a leading tire and automotive equipment manufacturer, has announced the establishment of a new unit dedicated to semiconductor circuits. The new unit, known as Advanced Electronics & Semiconductor Solutions (AESS), will design, manufacture, and market semiconductor circuits, thereby expanding the company's automotive systems portfolio. This strategic move aims to strengthen Continental's position in the rapidly growing automotive electronics market.

The AESS unit was formally established to fulfill internal demand for automotive semiconductors. The organization will focus on developing and verifying these semiconductors, while GlobalFoundries (GF) will serve as the exclusive manufacturing partner. GF, a leading manufacturer of essential semiconductors, is renowned for its power-efficient and high-performance solutions across various industries, including automotive.

Philipp von Hirschheydt, a member of the Continental Executive Board and CEO of the future Aumovio, emphasized the significance of this initiative. "The creation of this fabless semiconductor unit will strengthen Continental’s position not only by reducing geopolitical risks but also by becoming more self-reliant in this field," he stated.

The automotive industry's demand for semiconductors to enhance electronic content for Software-defined Vehicles (SDVs) is increasing. According to a report by MarketsandMarkets, the global automotive semiconductor market is projected to reach approximately €110 billion by 2032 [2]. This growing market necessitates strategic investments in semiconductor development to ensure long-term success.

The AESS unit is part of Continental's broader strategy to increase resilience and ensure future success. By developing semiconductors internally, the company aims to reduce geopolitical risks and enhance its self-reliance. This initiative aligns with the Automotive Board's long-term strategy to invest in technology and increase self-sufficiency.

Niels Anderskouv, president and chief operating officer at GF, expressed his pride in supporting Continental and the launch of the AESS organization. "Our silicon-proven portfolio of automotive-qualified process technologies, supported by our resilient global footprint and track record of manufacturing excellence, will enable Continental to deliver innovative solutions for the next generation of safe, connected, and autonomous vehicles," he said.

The new organization is expected to create a resilient supply chain, improve product quality, and reduce time to market. It also has the potential to generate savings and efficiencies, thereby enhancing the company's cash flow. As part of the Operations and Technology organization, AESS will strengthen Continental's position as an automobile component manufacturer.

The establishment of AESS supports Continental's goal of becoming a more integrated and technology-driven company. This initiative is a significant step toward building the capability to design and manage semiconductor production in partnership with leading semiconductor manufacturers, such as GF.

References:
[1] https://www.continental.com/en/press/press-releases/20250623-aess/
[2] https://www.prnewswire.com/news-releases/china-semiconductor-market-for-automotive-worth-419-15-billion-in-2024--marketsandmarkets-302486107.html