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Honda and Japanese automakers modernize semiconductor supply chains to phase out legacy chips
Wednesday, January 21, 2026 at 09:08 AM
Honda and other major Japanese automakers are transitioning away from 1970s-era legacy semiconductors by enhancing supply chain visibility to mitigate future disruption risks. This move involves shifting toward more modern manufacturing processes and closer collaboration with foundries to ensure long-term stability in automotive chip procurement.
Context
Toyota and Honda have pivoted to a direct-partnership model with major semiconductor firms, including Renesas Electronics and TSMC, to stabilize their silicon supply chains. In a landmark January 2025 agreement, Honda and Renesas launched the co-development of high-performance 3-nanometer systems-on-chip for the Honda 0 Series electric vehicles. These chips, delivering 2,000 TOPS of AI performance, are essential for the automakers' transition to software-defined vehicles launching in the late 2020s.
This strategy seeks to mitigate intensifying geopolitical risks and avoid the production bottlenecks that previously caused output drops of nearly 40%. By sharing long-term production forecasts directly with foundries, the automakers are securing priority access to advanced logic and power chips. For investors, this integration is a vital defensive play to protect manufacturing margins as Toyota targets 3.5 million electric vehicle sales by 2030, ensuring that silicon shortages no longer derail global production targets.
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