Ford weighs leaving supply chain and buying chips from manufacturers

Robert Besser
23 Nov 2021, 12:46 GMT+10

To address the worldwide shortage of semiconductor chips, Ford Motor Company is looking to purchase chips directly from the world's third-largest foundry, GlobalFoundries Inc
Meanwhile, Ford CEO Jim Farley described the shortage of semiconductors as "the biggest supply shock" in the company's history, while hinting at the firm's focus of far greater involvement in chip manufacturing
The pact with GlobalFoundries signals one of the boldest agreements involving a semiconductor producing firm and a key automobile manufacturer, in a bid to bypass existing chip manufacturers

DETROIT, Michigan: In a bid to address the worldwide shortage of semiconductor chips, Ford Motor Company is looking to purchase chips directly from the world's third-largest foundry, GlobalFoundries Inc.

On November 18, Ford confirmed it was forging a "strategic collaboration" with GlobalFoundries Inc, which has raised $2.6 billion in its initial public offering in October.

Also, the foundry has relocated its headquarters to Malta, NY, after a shift from its earlier California location, in a bid to increase its output.

"If everything progresses as we hope, Ford and GlobalFoundries will team up to grow the supply for Ford's current vehicle lineup, and also do R&D work together," said Chuck Gray, Vice President at Ford, as quoted by Bloomberg.

Meanwhile, Ford CEO Jim Farley described the shortage of semiconductors as "the biggest supply shock" in the company's history, while hinting at the firm's focus of far greater involvement in chip manufacturing, with direct interactions and handling with chip manufacturers.

The pact with GlobalFoundries signals one of the boldest agreements involving a semiconductor producing firm and a key automobile manufacturer, in a bid to bypass existing chip manufacturers.

Following news of the agreement with Ford, GlobalFoundries stock rose 7.5 percent, trading up 5.8 percent to reach $66.34 at 9:39 a.m. in New York. Shares of Ford registered a one-percent increase to reach $20.06.

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