Automotive Chips – Ford Adds GlobalFoundries to Help Design and Supply

GlobalFoundries Inc. (Nasdaq: GFS) (GF), a semiconductor manufacturing firm, and Ford Motor Company (NYSE: F) yesterday announced “a strategic collaboration to advance semiconductor manufacturing and technology development within the United States, aiming to boost chip supplies for Ford and the U.S. automotive industry.” The strategic announcement about semiconductors garnered limited media attention because it was in the same news cycle as President Biden’s visit to GM’s Factory Zero EV plant in Detroit.

GF and Ford have signed a non-binding agreement for GF to create more semiconductor supply for Ford’s current vehicle lineup, as well as joint research and development to address the growing demand for feature-rich chips to support the automotive industry.

“These could include semiconductors for ADAS, battery management systems, and in-vehicle networking for an automated, connected, and electrified future. GF and Ford also will explore expanded semiconductor manufacturing opportunities to support the automotive industry,” the companies said. The collaboration does not involve cross-ownership between the two companies.

“It’s critical that we create new ways of working with suppliers to give Ford, and America, greater independence in delivering the technologies and features our customers will most value in the future,” said Jim Farley, Ford president and CEO. “This agreement is just the beginning, and a key part of our plan to vertically integrate key technologies and capabilities that will differentiate Ford far into the future.”

The announcement is harmonious with the auto industry’s need to build innovative business relationships to regain a semblance of balanced supply and demand for chips, as well as efforts to accelerate technology innovation for the U.S. auto industry.