GM and Ford ink supplier partnerships to combat chip crisis

American carmakers GM and Ford are taking steps to mitigate the impact of the global semiconductor supply chain crisis, which has adversely impacted the automakers the world over. The just-in-time production bubble has burst catastrophically, the problems accelerated by earthquakes, floods and fires at various manufacturing locations around the world, and exacerbated again by the Covid pandemic in Asia, where most chip manufacturing is centered.

Each car maker has a range of different scenarios, dictated by their supplier arrangements, production capacity and more, and all hanging on factors outside of their control, both in terms of chip supply easing as a result of falling demand in other industries or contracting, be it the result of floods, fire, earthquakes or coronavirus flare-ups.

GM is aggressively working towards ensuring sustained supplies of semiconductors. The company is working with as many as seven leading chip manufacturers – Qualcomm, STMicroelectronic, Taiwan Semiconductor Manufacturing Co, Renesas Electronics, ON Semiconductor Corp, NXP Semiconductors and Infineon Technologies – to ensure consistent supplies of chips.

As per a Bloomberg report, while speaking at a Barclays Auto Conference on Thursday, GM president Mark Reuss said that the company, which uses a wide range of semiconductors, now aims to reduce the types of chips to just three families over the future. That would help reduce the variety of chips GM orders by 95%, making it easier for semiconductor suppliers to cater to the carmaker.

Ford partners Global Foundries
Meanwhile, Ford announced a strategic partnership with Global Foundries Inc, a global leader in feature-rich semiconductor manufacturing, to advance semiconductor manufacturing and technology development within the United States, aiming to boost chip supplies for Ford and the US automotive industry.

The companies have signed a non-binding agreement that opens the door for GF to create further semiconductor supply for Ford’s current vehicle line-up and joint R&D to address the growing demand for feature-rich chips to support the automotive industry. These could include semiconductor solutions for ADAS, battery management systems, and in-vehicle networking for an automated, connected, and electrified future. GF and Ford also will explore expanded semiconductor manufacturing opportunities to support the automotive industry.

“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,” said Jim Farley, Ford president and CEO. “This agreement is just the beginning, and a key part of our plan to vertically integrate key technologies and capabilities that will differentiate Ford far into the future.”

“GF is committed to building innovative alliances with the world’s leading companies to enable the features in products that are pervasive throughout people’s lives,” said Tom Caulfield, GF CEO. “Our agreement with Ford is a key step forward in strengthening our cooperation and partnership with automakers to spur innovation, bring new features to market faster, and ensure long-term, supply-demand balance.”

A passenger vehicle typically uses around 1,000 semiconductors and any slowdown in the supply chain means manufacturing operations can come to a grinding halt. Inking long-term partnerships with chip suppliers is one way of judicious production planning for the future.