Honda Motor Company said it had agreed to strengthen its collaboration with Taiwan Semiconductor Manufacturing Company (TSMC) to secure future supplies of chips for its vehicles following the severe shortages which had held back vehicle production over the last two years.

The automaker said it expected to begin buying semiconductors directly from the world’s largest chipmaker from 2025 and also suggested the two companies were considering collaborating on product development.

Earlier this week Just Auto reported that Honda was stepping up development and production of battery electric vehicles (BEVs), with plans to invest US$40bn to achieve annual sales of 2m units globally by 2030 from very limited volume last year.

The company also aims to switch its entire product range to battery and fuel cell power by 2040 and is investing heavily in autonomous driving technology.

Securing a stable supply of advanced semiconductors would be crucial for Honda to achieve its goals.

President Toshihiro Mibe said: “Stable procurement of semiconductors has become essential with the ongoing automotive electrification and digitisation.”

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By GlobalData

Honda also said it planned to invest US$340m in the development of new solid state batteries and said it would “continue to secure stable supplies of battery materials by building strong supply chain partnerships, including with battery recycling businesses”.