Automotive technology illustration - Globalfoundries

Ford Partners with GlobalFoundries to Increase Chip Supplies

Source: CNBC

Ford Motor plans to increase its short- and long-term supply of semiconductor chips through a new partnership with GlobalFoundries.

The Detroit automaker and New York-based chip supplier on Thursday announced the signing of a nonbinding agreement for a strategic partnership that aims to increase the supply of chips to Ford from GlobalFoundries.

Globalfoundries has a chip manufacturing facility in Essex Junction, Vermont, employing approximately 2,000 employees.

Officials said the tie-up could eventually result in new chip designs specifically for Ford and an increase in the domestic production and supply of chips for the overall automotive industry.

“We’re working to reimagine our supply chain,” Chuck Gray, Ford vice president of vehicle embedded software and controls, told CNBC during a phone interview. “It will really help increase our independence.”

The companies declined to discuss financial details of the agreement or how much GlobalFoundries will increase supplies to Ford in the near term. This collaboration does not involve cross-ownership between the two companies. Gray described the talks as being in their “early days.”

Mike Hogan, GlobalFoundries senior vice president and general manager of automotive, said the agreement is part of a multipronged approach for the company to improve the supply of chips to the automotive industry.

“There will be some near-term expansion of capacity … but this is about building a different future,” Hogan said during the joint interview. “The automotive industry is fundamental to our strategy.”

The partnership comes as automakers such as Ford are still battling through a global shortage of semiconductor chips that has sporadically caused plant closures for the past year. It also follows the Biden administration urging companies to onshore manufacturing supply chains, including semiconductor chips.

“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,” Ford CEO Jim Farley said in a statement.

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