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Ford, GM Step Into Chip Business


A visual metaphor for the chips needed to make autos.

Automakers have been reluctant in the past to make long-term commitments to buy semiconductors or other raw materials.

Credit: auto.economictimes.indiatimes.com

Detroit's two biggest auto makers— Ford Motor Co. and General Motors Co. —are looking to get into the semiconductor business, after a year of computer-chip shortages that snarled their global factory output.

Ford on Thursday morning outlined a strategic agreement with U.S.-based semiconductor manufacturer GlobalFoundries Inc. to develop chips, a pact that could eventually lead to joint U.S. production.

GM later said it was forging ties with some of the biggest names in semiconductors—including Qualcomm Inc. and NXP Semiconductors NV—and has agreements in place to co-develop and manufacture computer chips.

The moves are the latest examples of how pandemic-related disruptions are prompting companies to exert greater control over their supply chains by moving production closer to home, or in some cases in-house. Multinational companies got an early shock in the health crisis when border closings, local restrictions and lockdowns caused chaos. Some have decided on permanent solutions.

From The Wall Street Journal
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