Ford enters into partnership with GlobalFoundries – shares of the chip manufacturer at the maximum
Ford Motor (F) and General Motors (GM) are entering into partnerships with chip manufacturers, which indicates the trend of switching to more steady supplies from manufacturers in the United States. GlobalFoundries (GFS) will become a strategic partner with Ford and produce custom car chips for other automakers.
On Thursday, Ford Motor (F), the No. 2 automaker in the United States, and semiconductor manufacturer GlobalFoundries (GFS), listed on the Nasdaq stock exchange on October 28;
Announced strategic cooperation, according to which the companies will carry out joint research and development of high-end chips, with expanded supplies to meet the demand of Ford and the U.S. automotive industry.
It did not disclose the financial side of the partnership; the companies only clarified that the cooperation does not involve a merger, and GlobalFoundries will produce processors for other automakers.
Against the news background, GlobalFoundries shares peaked during trading on Thursday, but at the end of the trading session, reduced the growth momentum to +2.5%.
GlobalFoundries shares have risen 38.7% in 16 trading days since listing on Nasdaq, during which one of the world’s leading semiconductor manufacturers raised $2.6 billion. For the construction of a second chip manufacturing plant in Malta, New York.
Most of the shares of GlobalFoundries belong to the Abu Dhabi Sovereign Wealth Fund; the capitalization of the semiconductor company as of the close of trading on Thursday was $34.3 billion.
Ford investors reacted more skeptically to the news. Ford shares, up 122.5% since the beginning of the year and 55.6% over the last quarter, closed down 2% on Thursday. Trading signals and forecasts for Ford shares.
Ford also electric vehicle production capacity to 600,000 units worldwide by 2023. CEO Jim Farley expects it will make the company the second-largest electric vehicle manufacturer in the U.S. after Tesla (TSLA).
The shortage of chips has caused changes in the automotive industry.
Today, automotive and other companies in the technology industry are striving to create reliable supply chains and develop chips independently.
The partnership between Ford and GlobalFoundries proves the desire of automakers, in general, to create more controlled supply chains of chips from manufacturers in the United States while achieving better positions for competition in the industry.
According to consulting firm Alix Partners, the shortage of chips caused by the pandemic problems has reduced automakers’ profits, including Ford, and cost the global automotive industry $210 billion in sales due to downtime and slowing production at factories.
So, Intel (INTC) today is betting heavily on the growth of sales of automotive chips, expanding its production, and building new factories.
General Motors (GM) said it is establishing ties with some of the largest semiconductor manufacturers, including Qualcomm (QCOM) and NXP Semiconductors (NXPI), and has agreements on joint development and production of computer chips.
Ord has identified three categories of chips that it will develop together with GlobalFoundries: autonomous driving technologies, in-car data transmission, and battery management chips.
The “autonomous driving” chip market by Nvidia (NVDA), Intel, and Qualcomm use advanced chip manufacturing technology that GlobalFoundries currently cannot produce.
Tesla, in turn, abandoned Nvidia chips and developed chips on its own but declares that it does not plan to create its production of processors.
Other chip categories, such as networks and battery management, are dominated by existing automotive vendors NXP, Marvell Technologies, and Analog Devices, many of which produce their chips or work with competitors GlobalFoundries.
