Ford And GM Could Soon Be Getting Into The Semiconductor Production BusinessZeroHedge News

Ford And GM Could Soon Be Getting Into The Semiconductor Production Business

There’s no better reminder of how markets adapt to problems than the free market finding solutions to roadblocks in an industry. That’s what’s happening in automotive, where it appears that Ford and GM are going to start vertically integrating – by producing – to solve their semiconductor woes.

Both automakers are looking to get into the semiconductor business, a new report from the WSJ claims. In fact, Ford has already outlined a strategic agreement with GlobalFoundries to develop chips in a move that “could eventually lead to U.S. production”.

The partnership is focused on “producing higher-end chips that would go into vehicles several years out,” WSJ wrote.

Chuck Gray, Ford’s vice president of vehicle embedded software and controls, said: “We feel like we can really boost our product performance and our tech independence at the same time.”

Ford is considering bringing chip development in-house, the report says. Its own chips could help improve some vehicle features, the company believes.

GM is also partnering with names like Qualcomm and NXP Semiconductors, the report says, and has agreements in place to manufacture chips.

GM President Mark Reuss said: “We see the semiconductor requirements more than doubling over the next several years.”

GM is also aiming to reduce the number of unique microprocessors needed for new vehicles by 95%. It plans on developing three core families that use similar architecture in order to do so. 

Mike Hogan, a senior vice president in charge of GlobalFoundries automotive business said: “This is a great example of how you take a crisis and turn it into an opportunity.”

It’s not a huge surprise that automakers want to take production matters into their own hands. Recall, we wrote in September how major auto manufacturers were predicting that the global semi shortage “may not just go away” on its own in 2022. 

Volkswagen Chief Executive Officer Herbert Diess said at the time: “Probably we will remain in shortages for the next months or even years because semiconductors are in high demand. The internet of things is growing and the capacity ramp-up will take time. It will be probably a bottleneck for the next months and years to come.”

Ola Kallenius at Daimler and Oliver Zipse of BMW also added to the pessimism. Kallenius said that the shortage “may not entirely go away” in 2022, according to Bloomberg. Zipse said there could be another 6 to 12 months left in the shortage.

Tyler Durden
Fri, 11/19/2021 – 19:20Read More

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