Ford Motor Collaborates With GlobalFoundries to Combat Supply Issues

The semiconductor shortages continue to raise their ugly head with the auto industry. Ford Motor Company is working to combat this issue.

The lack of these chips and the global shutdown caused by the coronavirus together caused what could be long-term challenges for the global auto industry. Ford is trying to find ways to be less dependent upon the same supply chains as the rest of this industry. This new independence might work out for Ford, but could put GlobalFoundries, a New York-based chip supplier, in a predicament going forward.

Production Stops Continue to Occur

Ford continues to shut plants down for short periods of time, to focus on specific models while leaving others sitting unfinished, and to find ways to bring more semiconductor chips to these assembly plants. No automaker wants to face problems in the supply chain, but that seems to be a challenge on every platform as long as all vehicles rely on the same semiconductors for their vehicles. The goal for Ford is to build a cache of these chips in the short term, create a partnership for new chip designs, and to be the primary customer of this domestic producer of these computer chips.

Independence is Key for Ford

The Ford Motor Company has typically been at the forefront of vehicle development. This is the same company that brought us the moving assembly line, took down Ferrari at Le Mans, and had the top-selling truck for the past forty years. It makes sense that Ford would not want to be put in the same position they were in only two years ago when the entire automotive industry was crippled by a shortage of semiconductor chips. If they can create a unique partnership with GlobalFoundries, they might have their own supplier of semiconductor chips, keeping other automakers out of the mix.

Details Weren’t Released

Even though both companies declined to offer details of the agreement, there is some discussion of expanding the capacity for GlobalFoundries. Could this signal an investment in the producer of semiconductor chips by Ford Motor Company? It certainly could, and with expanded capacity, the new areas of the company would be required to build the chips needed by Ford and no other company. If this were the approach, GlobalFoundries could still supply other automakers with chips, but a specified number would always be for Ford, increasing the capacity for the blue oval brand.

This Partnership Could Appease the Current Presidential Administration

The troubles of the past couple of years gave President Biden the right platform to urge automakers in the United States to bring more manufacturing supply chains onshore. This means working with more domestic companies whenever possible. While most semiconductor chips come from foreign companies, there are some fabricators in the United States, including GlobalFoundries. Ford has taken the first step forward by partnering with this company to bring more chips to their assembly plants. We should learn more of the details of this partnership in the near future, giving us an idea of just how independent Ford expects to be with this new deal.