GM has announced a new strategic, long-term agreement with semiconductor manufacturer GlobalFoundries (GF) establishing a dedicated capacity corridor exclusive to GM, with GF manufacturing for GM’s key chip suppliers.
The move supports GM’s move to reduce the number of unique microchips needed to produce its various vehicle model lines. GM states that this strategy will enable a higher volume of better-quality microchips, a critical step as the demand for new chips increases.
“We see our semiconductor requirements more than doubling over the next several years as vehicles become technology platforms,” said GM executive vice president of Global Product Development, Purchasing and Supply Chain, Doug Parks. “The supply agreement with GlobalFoundries will help establish a strong, resilient supply of critical technology in the U.S. that will help GM meet this demand, while delivering new technology and features to our customers.”
The new chips will be manufactured at GF’s semiconductor facility in Upstate New York, reinforcing U.S.-based supply chain links.
“Thanks to my CHIPS and Science Act, we are bringing manufacturing back to our country and America’s supply chains are being secured, creating good-paying jobs here in Upstate New York, not overseas,” said U.S. Senate Majority Leader Charles Schumer. “This partnership is yet another example that our nation’s future will be built in Upstate New York, with the Capital Region as a global center for the future of the microchip industry.”
The announcement follows a global microchip shortage that decimated auto manufacturer production, including at GM. In response to the shortage, GM enacted a “build shy” strategy wherein vehicles were produced without certain features in order to keep production lines moving. These vehicles were later retrofitted with the missing features as additional microchips were sourced. At the height of the shortage, GM had accumulated tens of thousands of unfinished vehicles awaiting new chip supplies prior to being shipped.
Looking ahead, GM states that it aims to produce its own family of microchips by 2025 in order to offset any possible future chip-related production issues.