Ford Enters Computer Chip Business As Supply Shortage Extends

Ford Motor Co. is in talks with a computer chipmaker to bolster its semiconductor supplies and avoid a repeat of this year’s auto plant shutdowns caused by semiconductor shortages.

Few details on the non-binding deal with GlobalFoundaries Inc. have been released, but the deal aims to increase supply through the joint development of automotive-grade chips. And that could lead to joint manufacturing to support the auto industry, the companies said in a prepared statement Thursday.

Ford has been hit particularly hard by a global chip shortage that has weighed on nearly every automaker. Like other companies, Ford has sometimes had to temporarily shut down auto factories and even build models without computers, and install them later.

The company’s sales in the United States fell 27% from July to September and it lost 2.4 percentage points of market share largely because it could not produce enough vehicles to meet demand. consumer demand.

“This agreement is just a start and a key part of our plan to vertically integrate key technologies and capabilities,” said CEO Jim Farley, who is pushing Ford to further develop its supply chain to ensure that coins continue to circulate.

Spokeswoman Jennifer Flake said the companies were in the “memorandum of understanding” phase of their relationship, but they wanted to work together to design chips and potentially leverage their manufacturing experience.

GlobalFoundaries, based about three hours north of New York City in the city of Malta, says on its website that it has chip factories in the United States, Germany and Singapore, and that it is among the most the world’s largest independent semiconductor manufacturers with more than 15,000 employees.

Following: GM Partners With Suppliers To Find Chip Solution In North America

Following: Whitmer and other state governors urge Congress to take action to address chip shortage

Financial details of the deal were not disclosed as it does not involve cross-ownership between the companies, the statement said.

The chip shortage has its roots in the spring of 2020, as global automakers have been forced to close factories to stop the spread of the novel coronavirus. Factories came back online sooner than expected with safety precautions, but by that time many chipmakers had shifted production to high-demand consumer electronics.

A fire at an auto chip factory in Japan compounded the problem. Since most chips are made in Asia, the shortage has highlighted a lack of chip manufacturing capacity in the United States that has caught the attention of the Biden administration.

Industry executives and analysts predict that the shortage will last much of next year, and automakers may not return to normal production until 2023.

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