Ford and chipmaker announce non-binding “partnership” to alleviate bottlenecks

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To address the ongoing global chip shortage, chipmaker GlobalFoundries and Ford Motor Company announced a “strategic collaboration” today, both through a press release and coverage in the Wall Street Journal. The “non-binding agreement”, according to the press release, “opens the door” for GlobalFoundries to deliver more chips to Ford in the short term, and at the same time promises to work together on future chips for cars.

“This could include semiconductor solutions for ADAS, battery management systems and in-vehicle networking for an automated, networked and electrified future,” said the press release. “GF and Ford will also explore expanded semiconductor manufacturing capabilities to support the automotive industry.”

That all sounds promising, although the press release does not commit either company to any particular action. When Ford spokeswoman Jennifer Flake was contacted for more information, she reiterated that this was “a collaboration agreement in the areas identified in the press release,” but had no further information to share.

Automakers have been hit hard by the chip shortage, in part due to business decisions made at the start of the COVID-19 pandemic. In anticipation of lower demand, automobile manufacturers reduced their chip orders and chip manufacturers, in turn, cut back chip production. But demand for new vehicles (and all kinds of goods) has declined faster than expected, and automakers cutting their orders found themselves at the end of a long line waiting for more chips.

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The results were far-reaching. An April 2021 article by Detroit Free Press showed a parking lot full of Ford F-150s waiting for chips but otherwise fully assembled. Chip shortages slowed or stopped production at many car factories this year, and shortages of new cars had far-reaching repercussions, driving prices up from car rentals to used cars.

If the agreement between Ford and GlobalFoundries to develop future chips bears fruit, this would be yet another example of a company that chooses to develop its own purpose-built chips rather than relying on general-purpose chips like Intel, AMD or Qualcomm, Samsung, Nvidia or MediaTek. Apple is perhaps the most famous example, thanks to the Apple silicon chips that have replaced Intel in recent Macs. But Google has also developed its own chip for its latest flagship Pixel phones, and Amazon has deployed its own chips in its servers to enhance the performance and capabilities of the Alexa voice assistant. Intel, which for decades only made its own chips in its factories, is even taking steps to open up factory capacity for other companies that want to make their own designs.

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