GM has signed a long-term agreement with GlobalFoundries to establish exclusive production capacity of U.S.-produced semiconductor chips.
The exclusive production of chips for GM will be an expansion of the New York-based company's operations, according to GlobalFoundries CEO Thomas Caulfield.
The companies declined to disclose details such as cost and production timing. They expect the deal will enable chip production in higher volumes as well as offer "better quality and predictability, maximizing high value content creation for the end customer," according to the release. Automakers have historically not directly worked with chip suppliers. Instead, allowing their larger auto suppliers to handle such negotiations. However, the shortage of semiconductor chips has companies such as GM reaching fSemiconductor chips are extremely important components of new vehicles for areas like infotainment systems and more basic parts such as power steering and brakes. Depending on the vehicle and its options, experts say a vehicle could have hundreds of semiconductors.
The origin of the chip shortage dates to early last year when Covid caused rolling shutdowns of vehicle assembly plants. As the facilities closed, the wafer and chip suppliers diverted the parts to other sectors such as consumer electronics, which weren't expected to be as hurt by stay-at-home orders.
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