Ford companions with GlobalFoundries to extend chip provides

Ford Motor plans to extend its short- and long-term provide of semiconductor chips by way of a brand new partnership with GlobalFoundries.

The Detroit automaker and New York-based chip provider on Thursday introduced the signing of a nonbinding settlement for a strategic partnership that goals to extend the provision of chips to Ford from GlobalFoundries.

Officers stated the tie-up might ultimately lead to new chip designs particularly for Ford and a rise within the home manufacturing and provide of chips for the general automotive trade.

“We’re working to reimagine our provide chain,” Chuck Grey, Ford vp of car embedded software program and controls, instructed CNBC throughout a cellphone interview. “It should actually assist enhance our independence.”

The businesses declined to debate monetary particulars of the settlement or how a lot GlobalFoundries will enhance provides to Ford within the close to time period. This collaboration doesn’t contain cross-ownership between the 2 corporations. Grey described the talks as being of their “early days.”

Mike Hogan, GlobalFoundries senior vp and basic supervisor of automotive, stated the settlement is a part of a multipronged method for the corporate to enhance the provision of chips to the automotive trade.

“There can be some near-term enlargement of capability … however that is about constructing a special future,” Hogan stated throughout the joint interview. “The automotive trade is key to our technique.”

The partnership comes as automakers resembling Ford are nonetheless battling by way of a world scarcity of semiconductor chips that has sporadically brought about plant closures for the previous yr. It additionally follows the Biden administration urging corporations to onshore manufacturing provide chains, together with semiconductor chips.

“This settlement is only the start, and a key a part of our plan to vertically combine key applied sciences and capabilities that can differentiate Ford far into the long run,” Ford CEO Jim Farley stated in a press release.