Dependence Dynamics in the Upstream of Semiconductor Supply Chain to the Automotive; A case study with four embedded cases

Abstract

The increasing geopolitical uncertainty and prior disruption consequences have put pressure on automotive companies to increase visibility and control further upstream in the automotive semiconductor supply chain. This master thesis, initiated by an automotive OEM (the reference company), investigated the supply chains for four raw materials used in semiconductors; gallium, germanium, antimony and high- purity quartz. The focus was on mapping core actors, geographical locations for extraction, and understanding the dependencies and potential risks with these ma- terials. The method was based on a case study approach with four embedded cases, with each material being one case. Data was collected through extensive desk research, including market reports, annual reports and peer reviewed academic literature, and two rounds of semi-structured interviews with supply chain actors, experts and internal employees at the reference company. The findings show a highly concen- trated supply network for some parts of the chain, especially in China, who domi- nates the refining capacity across three of the materials. Additionally, the findings reveals multi-level dependencies across the supply chain. Organizational (micro- level), inter-organizational (meso-level) and systemic (macro-level) each contribute to supply risks in the value chain. With the use of resource dependency theory, power sources and multi-tier supply chain management, the study highlights that despite the eye-opener from COVID, companies still lack visibility beyond Tier 1 suppliers and strategies to reduce supply risks. The study found that reactive measures were more common than proactive ones across several tiers of the supply chain. Through mapping and analyzing de- pendence dynamics, this thesis aimed to provide insights and wake up calls for automotive OEMs and other actors across the supply chain, to prevent future dis- ruptions to stall a whole supply chain. The semiconductor supply network should aim to be more resilient, and the findings underscore the need for greater visibility and transparency to reduce dependencies and supply risks.