Ford, GM Cut Deals To Produce Computer Chips With Partners

Shortages of computer chips have been a nightmare for carmakers this year, forcing them to idle production at plants around the world and hindering their ability to meet a jump in demand for vehicles, CNN Business reported.

Photo Insert: US automakers are taking matters into their own hands to navigate the global chip crisis.

Now they've decided enough is enough; they're getting into the chip business themselves. The latest: Ford announced Thursday, Nov. 18, 2021, that it's partnering with GlobalFoundries, a chip manufacturer majority-owned by Abu Dhabi's sovereign wealth fund.

Together, the two companies plan to boost production capacity for Ford's lineup and conduct research on the semiconductors that will be crucial to the next generation of vehicles.

General Motors (GM) President Mark Reuss also said at an industry conference on Thursday that the company will team up with chipmakers like Qualcomm (QCOM) and Taiwan Semiconductor Manufacturing Co. (TSMC) to develop the chips it needs.

"We see the semiconductor requirements more than doubling over the next several years as the vehicles that we produce become more of a technology [platform]," Reuss said.

Remember: GM's revenue plunged nearly 25% last quarter despite record-high car prices, while Ford said its automotive revenue fell 4% from a year ago. The difficulty in securing chips has been a major reason the companies have been sputtering.

That's pushing carmakers to assume greater control of their supply chains. "It's critical that we create new ways of working with suppliers to give Ford — and America — greater independence in delivering the technologies and features our customers will most value in the future," Ford CEO Jim Farley said in a statement.

"This agreement is just the beginning."

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