Ford taking control of chip supply in Globalfoundries deal

Sick of taking second best, car industry makes its own deals

Chip makers like Nvidia and Intel see semiconductor content rising in the years ahead, which means a bigger business opportunity. What they may not be expecting is car makers becoming major chip contractors themselves.

Ford announced it collaboration to GlobalFoundries to design and manufacture semiconductors to secure its chip supply amid shortages. The deal is aimed at the US market.

The chips will be designed for electric vehicles and cars with autonomous driving features. It will also cover networking chips for computers in cars, and battery management systems.

It wasn't clear if Globalfoundries would help Ford in chip designs.

"It is too premature to discuss that level of design detail," a spokeswoman told The Register.

A shortage of chips is forcing car makers to shut down factories and cutting features from vehicles. Porsche selling cars with dummy chips that it could ultimately replace with real chips, and GM has removed features like auto start-stop due to chip shortages and Toyota has put factories on limited operations.

Car makers are putting available chips in more expensive vehicles, said Kurt Sievers, CEO of NXP, during an earnings call with financial analysts earlier this month.

The other option is for car makers to cut reliance on middle-men like NXP and control the chip supply chain in their own hands, which Ford is doing. That will also set the stage for Ford to write custom software for its cars.

It's like Apple bypassing chip makers and going directly to Taiwan Semiconductor Manufacturing Co. to manufacture homegrown chips for its devices.

The likes of Intel, Nvidia and ARM are building chip platforms that back a software-defined car-as-a-service model whereby drivers can pay subscriptions for services in connected cars.

Globalfoundries went public earlier this month, and is looking to grab more business from car makers. The company is looking to use older manufacturing nodes like the 22-nm process to create power efficient circuits for cars that don't knock out battery life in electric cars.

Globalfoundries also has a factory in Dresden, Germany, which is close to automakers. ®