Highlighting the signficant shift in the automotive semiconductor supply chain, Ford has signed a ground-breaking deal to buy chips directly from foundry GlobalFoundries in the US that could well lead to it buying an ASIC design house.
The strategic collaboration aims to advance semiconductor manufacturing and technology development within the US and boost chip supplies for Ford and the US automotive industry. This follows suggestions by General Motors that it also would buy chips directly.
GF and Ford also will explore expanded semiconductor manufacturing opportunities to support the automotive industry, which says that Ford will pay upfront to guarantee capacity for its suppliers. This presumably includes Qualcomm which has a deal with Ford for V2X chips built by GF.
The non-binding agreement opens the door for GF to create further semiconductor supply for Ford’s current vehicle lineup and joint research and development to address the growing demand for feature-rich chips for automotive. These could include chips for ADAS, battery management systems, and in-vehicle networking for an automated, connected, and electrified future.
GF process technology is focussed on mainstream digital and mixed signal technologies from 12nm up, with a focus on 22nm and 28nm production. The deal implies that Ford could look at commissioning pin compatible ‘fit, form and function’ alternatives to current chips from Texas Instruments and NXP where shortages have held up production. This is more likely to include dual sourcing agreements to ensure regular supply of future parts.
As neither Ford nor GF currently have chip design capabilities, this suggests there will be work for US design houses with experience in such parts, working with Ford’s R&D department. Who would own the IP for such parts, which would be made in high volume, would be a key question. This is likely to see Ford purchase a US or European ASIC design house as part of a move to vertical integration flagged by Jim Farley, president and CEO of Ford.
“This agreement is just the beginning, and a key part of our plan to vertically integrate key technologies and capabilities that will differentiate Ford far into the future,” said Farley. “It’s critical that we create new ways of working with suppliers to give Ford – and America – greater independence in delivering the technologies and features our customers will most value in the future.”
The move also opens up questions on the use of GF’s fab in Dresden for parts for Ford Europe, as well as the implications for STMicroelectronics as a major automotive chip suppler in this area and what moves the other major car maker Stellantis might make. Stellantis, which owns the Chrysler brand, is also more heavily involved with Europe with Fiat, Peugeot, Citroen, Opel and Vauxhall.
“GF is committed to building innovative alliances with the world’s leading companies to enable the features in products that are pervasive throughout people’s lives,” said Tom Caulfield, GF CEO. “Our agreement with Ford is a key step forward in strengthening our cooperation and partnership with automakers to spur innovation, bring new features to market faster, and ensure long-term, supply-demand balance.”
The deal does not involve cross-ownership between the two companies.
Ford has also announced that it is no longer working with electric pickup truck maker Rivian to use its technology, but will remain an investor.
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