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Researched by Industrial Info Resources (Sugar Land, Texas)--Ford Motor Company (NYSE:F) (Dearborn, Michigan) and chip manufacturer GlobalFoundries (NASDAQ:GFS) (Malta, New York) recently announced a strategic partnership to boost the automaker's semiconductor chip supply.
The non-binding agreement would increase the automaker's chip supply, and also calls for research and development in utilizing chips for automotive features such as driver-assistance systems, battery-management systems, and in-vehicle networking, to support the U.S. auto industry's "automated, connected, and electrified future," according to a press release.
It is not clear whether the partnership will boost the entire auto industry's chip supply, just that it "will explore expanded semiconductor manufacturing opportunities to support the automotive industry." Terms of the deal were not included, but it does not involve any cross-ownership between the companies.
Tom Caulfield, chief executive officer of GlobalFoundries added, "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."
GlobalFoundries operates chip-manufacturing plants in the U.S., Germany and Singapore, and raised $2.6 billion in an initial public offering in late October. Of this, $1.5 billion will be spent on capital expenditures, Caulfield told CNBC in an interview. He expects the company to prosper, thanks to increased demand, even after the pandemic-related supply-chain issues subside. "I think for the better part of the next five to 10 years, we're going to be chasing supply not demand," he said.
Ford Chief Financial Officer John Lawler said in a third-quarter earnings press release that its chip-supply challenges could last until 2023, although the shortage should ease in the fourth quarter. Ford certainly has seen some improvement in sales, with 175,918 new vehicles sold in October--its best month by volume since April.
Many automakers have been forced to curtail production due to the chip shortage. For more information, see August 5, 2021, article - Semiconductor Chip Shortage Bedevils U.S. Automakers.
However, Ford is still moving forward with high-dollar capital projects, including several related to electric vehicles (EV). In September, the automaker and its EV battery supplier, SK Innovation (Seoul, South Korea), announced a joint venture--BlueOval SK-- to build three EV battery manufacturing sites and one electric truck assembly plant in the Southeast region. The combined $5.8 billion, 1,500-acre BlueOval SK Battery Park in Glendale, Kentucky, about 50 miles southeast of Louisville, will provide Ford's North American plants with batteries for its next generation of electric Ford and Lincoln vehicles.
A $3.4 billion Phase 1 is expected to kick off in June 2022, with completion in September 2025, and feature first production in late 2025. The $2.3 billion Phase 2 is expected to kick off a year later. The complex will create close to 5,000 new jobs, according to a related press release. Subscribers to Industrial Info's Global Market Intelligence (GMI) Industrial Manufacturing Project Database can click here for detailed reports on Phase 1 and Phase 2.
For information on the joint venture's additional battery-manufacturing facility and electric truck assembly plant in Stanton, Tennessee, see September 30, 2021, article - U.S. Electric Vehicle Market Still Faces Big Challenges, Despite New Investment Announcement.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
The non-binding agreement would increase the automaker's chip supply, and also calls for research and development in utilizing chips for automotive features such as driver-assistance systems, battery-management systems, and in-vehicle networking, to support the U.S. auto industry's "automated, connected, and electrified future," according to a press release.
It is not clear whether the partnership will boost the entire auto industry's chip supply, just that it "will explore expanded semiconductor manufacturing opportunities to support the automotive industry." Terms of the deal were not included, but it does not involve any cross-ownership between the companies.
Tom Caulfield, chief executive officer of GlobalFoundries added, "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."
GlobalFoundries operates chip-manufacturing plants in the U.S., Germany and Singapore, and raised $2.6 billion in an initial public offering in late October. Of this, $1.5 billion will be spent on capital expenditures, Caulfield told CNBC in an interview. He expects the company to prosper, thanks to increased demand, even after the pandemic-related supply-chain issues subside. "I think for the better part of the next five to 10 years, we're going to be chasing supply not demand," he said.
Ford Chief Financial Officer John Lawler said in a third-quarter earnings press release that its chip-supply challenges could last until 2023, although the shortage should ease in the fourth quarter. Ford certainly has seen some improvement in sales, with 175,918 new vehicles sold in October--its best month by volume since April.
Many automakers have been forced to curtail production due to the chip shortage. For more information, see August 5, 2021, article - Semiconductor Chip Shortage Bedevils U.S. Automakers.
However, Ford is still moving forward with high-dollar capital projects, including several related to electric vehicles (EV). In September, the automaker and its EV battery supplier, SK Innovation (Seoul, South Korea), announced a joint venture--BlueOval SK-- to build three EV battery manufacturing sites and one electric truck assembly plant in the Southeast region. The combined $5.8 billion, 1,500-acre BlueOval SK Battery Park in Glendale, Kentucky, about 50 miles southeast of Louisville, will provide Ford's North American plants with batteries for its next generation of electric Ford and Lincoln vehicles.
A $3.4 billion Phase 1 is expected to kick off in June 2022, with completion in September 2025, and feature first production in late 2025. The $2.3 billion Phase 2 is expected to kick off a year later. The complex will create close to 5,000 new jobs, according to a related press release. Subscribers to Industrial Info's Global Market Intelligence (GMI) Industrial Manufacturing Project Database can click here for detailed reports on Phase 1 and Phase 2.
For information on the joint venture's additional battery-manufacturing facility and electric truck assembly plant in Stanton, Tennessee, see September 30, 2021, article - U.S. Electric Vehicle Market Still Faces Big Challenges, Despite New Investment Announcement.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
