Ford and chip maker emulate deal to boost semiconductor supply together

Ford has signed an agreement with GlobalFoundries, a New York-based semiconductor maker, to improve its supply of electronic chips as the car industry faces shortages.

The carmaker said the non-binding agreement “opens the door” for joint research, development and chip production to power its own assembly lines and others in the industry. American auto industry.

The auto industry has been held back by a lack of semiconductors, limiting new car sales. Manufacturers were unprepared before the slump in demand for cars and trucks caused by last year’s pandemic reversed faster than they expected. Now, they find themselves competing with consumer electronics manufacturers because munition of chips.

Now, the auto industry, where Toyota pioneered the just-in-time manufacturing concept in the 1970s, is re-evaluating how it protects this vital component used in everything from brakes to power steering. drive to the entertainment system. Ford said the deal could boost the company’s chip supply over the next few months.

GlobalFoundries, owned by sovereign wealth fund Mubadala Investment Company of Abu Dhabi, to the community last month. Shares of the chipmaker rose 5.4% to $66.07 on Thursday, while Ford rose 0.3% to $19.92.

They added that the companies’ R&D efforts could develop the cutting-edge chips needed for use in electric vehicle battery systems, semi-autonomous driving and over-the-air software updates.

Jim Farley, Ford chief executive, said the deal was “an important part” of the plan for vertical integration, a move that gives companies greater control over their supply chains.

GlobalFoundries CEO Tom Caulfield said partnering with an automaker would allow the company to “bring new features to market faster and ensure a long-term supply-demand balance.”

David Whiston, an analyst at Morningstar, said it was good to see Ford secure some domestic supply and change course in line with Farley’s comment in April that the company need to rethink how it ensures supplies of critical components.

But he added that he doubted the deal was “something that could be done quickly unless GlobalFoundries was fully qualified and dedicated to Ford”.

Terms of the deal were not disclosed, but Ford has no ownership stake in GlobalFoundries.

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