GM signs exclusive agreement to avoid future chip shortages – Review Geek

While the global shortage of auto chips that began in 2020 is finally easing, the years-long battle isn’t over for automakers. As a result, General Motors entered into an exclusive and one-of-a-kind supply agreement with Global Foundries (GF) and secured a direct supply of chips going forward.

GlobalFoundries, a microchip and semiconductor manufacturer, will expand its production capacity to create wafers specifically for General Motors and its key suppliers. So instead of just promising more inventory, you’ll have an entire production line dedicated to the automaker. The expansion will occur at its semiconductor factory in New York, which will also help bring more of the production process to the United States.

This first-of-its-kind deal will ship GF chips directly to GM’s key suppliers, ensuring the company has enough supply for regular vehicles and meets growing demand for EV chips, autonomous driving and other advanced driving and safety features.

According to Doug Parks, GM executive vice president of development and supply, “The supply agreement with GlobalFoundries will help establish a strong and resilient supply of critical technology in the US that will help GM meet this demand, while bringing new technologies and features to our customers.”

The long-term strategic agreement between GM and Global Foundries is a strong move to help prevent supply chain shortages, delivery issues and other slowdowns like many they’ve faced during the pandemic. The two companies said that this agreement will allow a greater volume of production and will offer “better quality and predictability, maximizing the creation of high-value content for the end customer.”

In addition, as technology and electric vehicles continue to improve and evolve, GM expects its semiconductor chip needs to more than double. You can’t just go back to pre-pandemic levels and you need to expand your supply chain to quickly meet growing demand.

While Ford has partnered with Global Foundries in 2021, the exclusive deal with GM sounds more promising. It’s one of many steps General Motors is taking to meet its goal of producing one million electric vehicles by 2025.

via CNBC