Ford and GlobalFoundries to develop chips together

Car manufacturer Ford enters a ‘strategic partnership’ with chip manufacturer GlobalFoundries. The two companies will jointly develop chips for cars, but will share few concrete details about the agreement.

Ford and GlobalFoundries form a partnership that could eventually lead to joint chip production in the US, the two companies say. The partnership would also expand chip production capacity for Ford in the near future, The Wall Street Journal reports.

In the longer term, the two companies also want to jointly carry out R&D work for several high-end chip categories important for cars, for example for use in autonomous vehicles. The two companies provide little further details. For example, it is not known how much money is involved in the collaboration. For example, Ford may be investing in production capacity at GlobalFoundries, but this is not concretely confirmed.

The collaboration is a result of global chip shortages, which have also affected many car manufacturers. Several companies have had to shut down the production of cars in the past period because of these shortages, including Ford. The chip shortages will cost the global auto industry 185 billion euros this year, AlixPartners predicted in September.

Ford CEO Jim Farley previously said the chip shortage is “the biggest supply shock” he has ever seen, Bloomberg writes. The company says it wants to get more involved in chip manufacturing by doing business directly with semiconductor manufacturers. With the partnership with GlobalFoundries, Ford is one of the first major automakers to partner directly with a chip maker.

GlobalFoundries reports to Bloomberg that Ford has already bought chips from the company, but the ongoing shortages forced the two companies to talk directly to each other and establish a closer relationship.

Other chipmakers are also giving increasing priority to the automotive sector. Intel previously indicated that it wants to produce chips for the automotive sector and Qualcomm also works on chips for cars. At the beginning of this year, TSMC, the current market leader among ‘external’ chip manufacturers, indicated that it also wants to give more priority to the production of chips for the automotive sector.