Ford Partners With Chip Manufacturers To Increase Its Own Supply

Ford Motor Co. plans to build chips for panning again.(photo: dok.unsplash)

JAKARTA - In response to the global semiconductor chip crisis, particularly in the automotive industry, Ford Motor Co. plans to build chips to recover its business with GlobalFoundries.

According to reports, Ford Motor is in talks with the computer chip maker to shore up its semiconductor supply and avoid a repeat of the auto plant shutdown this year caused by a semiconductor shortage.

The Detroit-based automaker and New York-based chip supplier yesterday announced the signing of a non-binding agreement for a strategic partnership aimed at increasing chip supplies to Ford from GlobalFoundries.

"This deal is just the beginning, and a key part of our plan to vertically integrate key technologies and capabilities," said CEO Jim Farley.

Farley also encouraged Ford to expand more of its supply chain to ensure parts continued to flow. If this agreement goes well, then the two can produce joint manufacturing to support the automotive industry.

Ford has been hit hard by a global chip shortage that has weighed on nearly every automaker. Like other companies, Ford sometimes had to temporarily shut down car factories and even build models without multiple computers, and reassemble them.

As a result, the company's US sales fell 27 percent from July to September and lost 2.4 percentage points of market share largely because it couldn't produce enough vehicles to meet consumer demand.

Spokeswoman Jennifer Flake said the companies were in the "memorandum of understanding" phase of their relationship but wanted to work together to design the chip and possibly take advantage of their manufacturing experience.

The chip shortage began in 2020 when global automakers were forced to close factories to stop the spread of COVID-19. Factories returned to operations sooner than expected with safety precautions, but by then, many chipmakers had shifted production to high-demand consumer electronics.

In fact, a fire at an automotive chip factory in Japan exacerbated the problem. Because most of the chips are made in Asia. Many suspect that this chip shortage will last until 2022.