Partnership between Ford and GlobalFoundries announced.

With the unprecedented semiconductor shortage that the automotive industry is going through many industry observers have wondered what is next. GM has been busy removing heated seat and steering wheel options, Hyundai has announced that it would be removing its smart cruise control option and other manufacturers have been discussing the impact of a significant reduction in vehicles that have been produced. Industry experts and vehicle owners all around the world have wondered what the solution is, how can we get out of this situation.

Turns out Ford has been progressive in their solutions and have recently announced a strategic collaboration between Ford and GlobalFoundries. Some casual observers have wondered why the USA doesn’t build semiconductor factories of their own to solve the supply issue that manufacturers are experiencing.

Since 1990 chip production has been declining in the USA at a dramatic pace, falling from 37% in 1990 to around 12% today. While 75% of chips come from Asia, we all know the benefits that come from production in these countries. Lower wages, less regulations, etc. leads to costs for manufacturers which results in lower costs to the end consumers.

So why do we not build our own semiconductor factories in North America, Price! (and maybe time). A new semiconductor factory takes roughly 3-5 years to build, and some have estimated at a cost of over $20 billion. Thankfully, some have taken note of these issues and are rising to take on the challenge. Biden’s recent $2 trillion infrastructure plan had some ideas on how to tackle this issue, $50 billion for domestic chip manufacturing incentives.

The Ford and GlobalFoundries partnership mean progress. The deal that was signed was a nonbinding agreement, which will allow GlobalFoundries the ability to produce chips for Ford vehicles. GlobalFoundries is the fourth largest semiconductor manufacturer in the world, and they currently have 3 American plants. The deal will see them supply the parts that they know best to Ford. Semiconductors for automotive micro controllers, advanced battery systems as well as ADAS related components.

One thing we be sure of is we do not know at this point what advances will be made with this agreement. But I think we can all agree this is a step in the right direction that will hopefully show manufacturers that North American production can compete and provide high quality components to OEM manufacturers without the supply issues that we have become so familiar with today

Staff Writer
Staff Writer
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