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ID: 220694


Date: 2021-11-18

Ford and chipmaker announce noncommittal “partnership” to alleviate shortages

"Non-binding agreement" promises more supply but is light on particulars. In an effort to combat the ongoing global chip shortage, chipmaker GlobalFoundries and the Ford Motor Company have announced a "strategic collaboration" today, both via press release and coverage in The Wall Street Journal. The "non-binding agreement," according to the release, "opens the door" for GlobalFoundries to deliver more chips to Ford in the short-term, while promising collaboration on future chips for cars. "These could include semiconductor solutions for ADAS, battery management systems, and in-vehicle networking for an automated, connected, and electrified future," the release reads. "GF and Ford also will explore expanded semiconductor manufacturing opportunities to support the automotive industry." This all sounds promising, though the press release doesn't actually commit either company to any specific actions.  When contacted for information on more particulars, Ford spokesperson Jennifer Flake reiterated that this was "an agreement to work together on the areas called out in the release," but had no further information to share. Automakers have been hit hard by the chip shortage, stemming in part from business decisions made early in the COVID-19 pandemic. Anticipating reduced demand, automakers cut back their chip orders, and chipmakers in turn cut chip production. But demand for new vehicles (and all kinds of goods) has surged back more quickly than expected, and automakers who cut their orders have found themselves at the back of a long line waiting for more chips. The results have been far-reaching. A Detroit Free Press piece from April of 2021 showed a parking lot full of Ford F-150s waiting for chips but otherwise fully assembled. Chip shortages have slowed or halted production at many car factories this year, and a short supply of new cars has had extensive knock-on effects, driving up the prices of everything from car rentals to used cars. If the agreement between Ford and GlobalFoundries to develop future chips bears fruit, it would be yet another example of a company choosing to design its own purpose-built chips rather than relying on general-purpose chips made by the likes of Intel, AMD, Qualcomm, Samsung, Nvidia, or MediaTek. Apple is perhaps the highest-profile example, thanks to the Apple Silicon chips that have replaced Intel's in recent Macs. But Google has also created its own chip for its latest Pixel flagship phones, and Amazon has been deploying its own chips in its servers to improve the performance and capabilities of the Alexa voice assistant. Intel, which for decades has only manufactured its own chips in its factories, is even making moves to open up factory capacity for other companies that want to manufacture their own designs.