Introduction:
In today’s fast-moving chip age, semiconductors have become the beating heart of innovation. Just like a conductor leads a symphony, chips orchestrate every function inside modern cars—from AI-assisted driving to real-time safety controls. And now, one of the world’s top auto parts suppliers, Continental, has decided to take the lead in this high-stakes race.
On June 24, 2025, Continental announced the launch of its own semiconductor division, marking a strategic pivot into chip design. This bold move aims to meet the surging demand for automotive chips and align with the future of software-driven mobility.
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Quick Overview – 5 Key Takeaways:
New Division Launched: Continental set up the AESS (Advanced Electronics and Semiconductor Solutions) unit.
Chip Focus: AESS will design custom automotive chips for its new tech unit Aumovio.
Fabless Model: Chip production will be handled by GlobalFoundries, not in-house.
Business Realignment: Continental will spin off Aumovio and sell its drum brake unit in Italy.
Big Picture: The move responds to booming chip demand and the shift to software-defined vehicles.
The Chip Age Has Arrived
Modern cars need chips like the human body needs nerves. Each chip helps process information from cameras, sensors, and software to keep vehicles safe, smart, and connected
With the rise of electric vehicles (EVs) and autonomous driving, demand for custom automotive chips has exploded.
According to Statista, the automotive semiconductor market is expected to reach $132 billion by 2030, nearly doubling from 2022.
This growth reflects the shift toward software-defined vehicles (SDVs), which rely on integrated chips for real-time computing and edge AI.
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Continental’s Strategy: From Parts to Platforms
To tap into this booming market, Continental launched the AESS division, which will focus on designing specialized chips. These chips will power Aumovio, the company’s independent automotive tech subsidiary set to go live in September 2025.
Rather than investing in costly chip fabrication plants, Continental chose a fabless model. It will design the chips and partner with GlobalFoundries for production—combining design flexibility with world-class manufacturing.
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Table: Continental’s Chip Model Breakdown
| Category | Responsibility |
|---|---|
| Chip Design & IP | Continental (AESS) |
| Manufacturing | GlobalFoundries |
| Application Target | Aumovio’s software-defined cars |
Reinventing the Automotive Value Chain
Continental is also reorganizing its portfolio. It plans to sell its drum brake R&D facility in Italy to Mutares SE & Co., signaling a clear shift from mechanical components to high-tech electronics. This aligns with the broader industry trend where traditional suppliers transform into digital solution providers.
A Fitting Analogy: Chips as the Brain of the Car
Think of it this way: just as the brain controls every function in the human body, semiconductors are now the brains of modern vehicles. If a car’s engine is the muscle, chips are the intelligence. And just as you wouldn’t outsource your thinking to someone else, automakers now want full control over their chip design. That’s what Continental is doing—taking charge of its own brainpower.
techovedas.com/5-automotive-idms-leading-the-evs-vehicles-and-autonomy-revolution-2024-2025
Conclusion: A Strategic Move for the Future
Continental’s new semiconductor division is more than just a business decision—it’s a visionary step into the future. With software-defined vehicles becoming the norm, owning chip design gives automakers an edge in innovation, safety, and performance.
As chips become the core of the modern car, Continental isn’t just adapting—it’s driving the change.
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