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Auto, Ford and GM enter the chip business to address component shortages

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MILANO – Embarrassed by the lack of chips, the auto industry is preparing to tackle the issue by entering directly into the business of manufacturing electronic components. There is one of the first brands to move in this direction Ford, which yesterday signed a non-binding collaboration agreement with the microchip manufacturer GlobalFoundries to get a greater supply of electronic components for their vehicles.

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The two companies, a statement said, will collaborate in research and development (R&D) to address the “growing demand” for microchips that the automotive industry needs. “GlobalFoundries and Ford will explore opportunities to increase semiconductor manufacturing to support the industry,” they said. “This agreement is just the beginning and a key part of our plan to vertically integrate key capabilities and technologies,” said Ford President and CEO Jim Farley.

On the same wavelength it also moves General Motors, which as reported by the Wall Street Journal it would be making deals with some of the world’s largest semiconductor manufacturers, including Qualcomm and Nxp Semiconductors, to collaborate on chip manufacturing.

The crisis in global supply chains is forcing large industries, including the auto industry, to rethink their supply chains, physically bringing the sources of their supplies closer together or in some cases, as the auto industry itself is beginning to do, internalising production through agreements with other companies. The lack of chips for months has been bringing the auto industry to its knees, whose production is forced to slow down or stop due to the shortage of semiconductors. According to data released yesterday by Acea, the European association of manufacturers, car registrations in Europe fell by 29.3% compared to the same month of 2020.

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