Ford and GM are involved in chip research and development
Ford and GM are involved in chip research and development

After a year of chip shortages affecting car production, Detroit's two largest automakers, Ford and General Motors, want to get into the semiconductor business.

According to the first report in the Wall Street Journal, Ford has announced joint chip development with chip maker GlobalFoundries, and the deal could lead to joint production in the United States.

General Motors claims that it has established cooperative relationships with some well-known semiconductor companies, including Qualcomm and NXP, and has reached an agreement to jointly develop and manufacture chips.

These measures are the latest examples of how disruption from the pandemic has led companies to better control their supply chains.

When border closures, local restrictions and blockades have taken a heavy toll, multinational companies have been hit by the health crisis from the start.

Ford's press release regarding the non-binding agreement is missing details. However, he mentioned plans to boost the semiconductor industry and develop technology in the United States.

The two companies made no promises to build factories, but said they were exploring more semiconductor manufacturing opportunities to support the auto industry.

Companies continue to face transportation delays and trucking bottlenecks, leading them to rethink the geographic distribution of their supply chain and prioritize strategies to ensure reliability over the outsourcing model.

In the auto industry, automakers are beginning to pull decades of decisions to outsource key components.

Ford wants to help solve the shortage

The recent vertical integration of automakers by going into battery and semiconductor manufacturing is the standard for Hyundai, which operates large parts divisions and steel mills.

A shortage of semiconductors has disrupted production of millions of cars scheduled for use in the entire industry this year. Some auto executives have said they are taking steps to improve chip delivery management. It is an important part of the supply chain.

Ford said its chip design could improve certain functions of the vehicle, such as those for autonomous driving or the electric vehicle's battery system. It can also help companies avoid bottlenecks in the future.

Part of the deal with GlobalFoundries is to increase the company's slide offerings in the short term. Compared to many other automakers, it has been hit hard by the lack of supplies.

The goal of joint development is to produce high-quality chips that can be used in vehicles for several years. But for automakers, building a chip design process can be challenging.

Designing advanced semiconductors using microtransistors is a challenging topic that typically takes years for companies to master. Ford competes for talent with chip companies like Intel and Nvidia and technology companies like Amazon and Apple.

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