Ford partners with GlobalFoundries to increase chip supplies

Recently manufactured Ford Motor Co. 2021 F-150 choose-up trucks are witnessed ready for missing areas in Dearborn, Michigan, March 29, 2021.

Rebecca Cook dinner | Reuters

Ford Motor plans to raise its limited- and extensive-phrase source of semiconductor chips as a result of a new partnership with GlobalFoundries.

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

Officials stated the tie-up could sooner or later end result in new chip models particularly for Ford and an improve in the domestic manufacturing and provide of chips for the general automotive sector.

“We’re doing the job to reimagine our source chain,” Chuck Grey, Ford vice president of car or truck embedded computer software and controls, told CNBC during a cellular phone interview. “It will actually help maximize our independence.”

The firms declined to go over monetary information of the agreement or how significantly GlobalFoundries will boost provides to Ford in the around expression. This collaboration does not contain cross-possession amongst the two companies. Grey explained the talks as remaining in their “early days.”

Mike Hogan, GlobalFoundries senior vice president and standard supervisor of automotive, reported the agreement is part of a multipronged tactic for the business to strengthen the provide of chips to the automotive field.

“There will be some around-term growth of capacity … but this is about developing a different foreseeable future,” Hogan reported all through the joint job interview. “The automotive sector is basic to our approach.”

The partnership comes as automakers these as Ford are nonetheless battling by way of a world-wide scarcity of semiconductor chips that has sporadically brought on plant closures for the previous calendar year. It also follows the Biden administration urging corporations to onshore producing provide chains, together with semiconductor chips.

“This arrangement is just the starting, and a critical section of our plan to vertically integrate vital technologies and capabilities that will differentiate Ford significantly into the upcoming,” Ford CEO Jim Farley stated in a statement.