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Ford, GlobalFoundries partner to offset chip supplies shortage


RIYADH: US Ford Motor Co will explore buying chips directly from GlobalFoundries, as a response to a global semiconductor shortage that’s crimped profits and production, Bloomberg reported.

The Dearborn Michigan-based automaker said Thursday it’s forming a “strategic collaboration” with GlobalFoundries, which went public in a $2.6 billion listing last month and recently moved its headquarters from California to Malta, New York, where it’s expanding a foundry to add capacity.

Ford CEO Jim Farley has called the chip shortage “the biggest supply shock” he’s ever seen, and said the company would get more deeply involved in semiconductor production, dealing directly with chipmakers, rather than relying on so-called Tier One suppliers to act as middlemen, according to Bloomberg.

This agreement marks one of the first direct tie-ups between a major automaker and a chip producer to result from the semiconductor shortfall.

The chip shortage has dented profits at carmakers including Ford, and cost the global auto industry $210 billion in lost production, according to the consulting firm Alix Partners.

The crisis has also forced auto executives to rethink their supply-chain strategies. Auto executives started considering doing chip design in-house as computing and software become central to modern vehicles, Bloomberg said.

Ford already uses chips from GlobalFoundries, but the crisis forced the two companies to speak directly and forge a closer relationship, said Mike Hogan, head of automotive at the chipmaker.

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