GM and GlobalFoundries: New Semiconductor Manufacturing Deal

By: | June 7th, 2023

Photo by Magnus Engø on Unsplash

General Motors (GM) signed a long-term direct and strategic agreement with the semiconductor manufacturing company GlobalFoundries (GF) for U.S.-manufactured semiconductor chips. This way, GM ensures microchip and semiconductor supply security, which is required for vehicle manufacturing.

This agreement supports GM’s strategy for reducing the number of chips needed for vehicles. GlobalFoundries previously announced the expansion of the manufacturing capacity in Malta, New York. Moreover, with the agreement, GlobalFoundries will dedicate a part of the factory only to GM. The company will provide computer chips to parts suppliers of GM, which manufacture computer control modules.

As said in a statement by the GM executive vice president of Global Product Development, Purchasing, and Supply Chain, Doug Parks, “We see our semiconductor requirements more than doubling over the next several years as vehicles become technology platforms,”, adding that “The supply agreement with GlobalFoundries will help establish a strong, resilient supply of critical technology in the U.S. that will help GM meet this demand, while delivering new technology and features to our customers.”

Furthermore, the president and CEO of GlobalFoundries, Dr. Thomas Caulfield, commented that “At GF we are committed to working with our customers in new and innovative ways to best address the challenges of today’s global supply chains,”, adding that “GF will expand its production capabilities exclusively for GM’s supply chain, enabling us to strengthen our partnership with the automotive industry and New York State, while further accelerating automotive innovation with U.S.-based manufacturing for a more resilient supply chain.”

As a result of the bipartisan CHIPS and Science Act, the domestic U.S. semiconductor research, development, and production is increasing, ensuring leadership in this crucial technology.

It was uncommon for vehicle manufacturers to make direct agreements with chip suppliers. However, this was changed with the semiconductor shortage, and companies such as GM have to secure such important electronic components, as vehicles have hundreds of different chip types. Chip shortages already last a couple of years, and started back in 2020, with the Covid pandemic.

The number of semiconductors and costs were not disclosed by both companies.


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