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Wednesday, December 8, 2021

Ford is committed to securing the supply of chips and directing their design

As more and more sophisticated cars consume more and more processing power, the shortage of semiconductors is irritating automakers and disrupting production around the world.

Ford Motor resolved this Thursday by announcing a collaboration that could give the company more control over both the supply and design of its chips – the brains needed to control engines, transmissions, brakes, infotainment systems, and more.

Ford said in a statement that it has signed a non-binding agreement with US-based semiconductor supplier GlobalFoundries to collaborate on chip development for Ford vehicles and that the companies will explore opportunities to expand domestic chip production.

Chuck Gray, Ford’s vice president of embedded software and vehicle controls, said that even with the new partnership, the automaker expects chip supply to remain uneven for some time. “We still think there will be seizures and onset next year,” he said.

But he added that the collaboration with GlobalFoundries should allow Ford to begin developing some of its own computer chips.

Until recently, many automotive components could be easily controlled using common computer microcircuits. But that’s no longer the case as manufacturers add increasingly sophisticated features such as battery monitoring, advanced driver assistance systems, and networked services.

“Computing power is new power,” said Mr. Gray. “The demand for computing power is so high right now, and we need to have the right chips to do the right things.”

In recent years, US automakers have hired thousands of software developers and programmers. Mr Gray said Ford now wants to bring in chip designers as well. “We will build this in the near future,” he said.

General Motors is also taking steps to better control chip development and availability. GM President Mark Reuss said Thursday that the company expects the number of semiconductors used in automobiles to double over the next few years. As a result, he said, GM is working with chip makers to develop three types of microprocessors to meet nearly all of its computing needs.

The moves are part of a strategy to reduce the number of chip varieties by 95 percent and should help increase chip supply while significantly reducing costs, Mr Reuss said at an automotive technology conference hosted by investment bank Barclays.

“This will lead us in the industry,” he said. “And it will help improve quality and predictability.”

To secure the supply of new chips made from an energy-efficient material called silicon carbide, GM last month struck a deal with Wolfspeed, a company formerly called Cree, which is building a plant in New York State.

Reuss said GM is in talks with many major suppliers to get enough chips to keep its factories running. Lack of shavings and stoppages of rolling production at car factories led to the fact that car dealers were left with a shortage of new cars on their lots.

Both Ford and GM said new car sales in the United States fell by about a third in the three-month period ending in September, dampening their profits.

Mike Hogan, GlobalFoundries’ senior vice president in charge of the automotive business, said discussions with Ford initially focused on securing key chips for the current car production. But the negotiations expanded to include other areas, including allowing Ford to develop early chip manufacturing processes that could affect performance such as the range of electric vehicles.

“Traditionally, there were a lot of players between us and someone like Ford,” said Mr. Hogan. The automaker’s move to become more involved in shaping chip technology “is a great example of what you’ll see changes,” he said.

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Another question is where the future parts will be manufactured. Most of today’s microcircuits are manufactured by Taiwan Semiconductor Manufacturing Company, which is by far the largest contract microcircuit manufacturer or foundry. But supply disruptions from Asia due to the pandemic have left politicians wary of dependence on factories in Taiwan, especially given China’s territorial claims to the island.

Thus, the Senate overwhelmingly approved a $ 52 billion subsidy package aimed at encouraging the construction of more chip factories in the United States, although that funding was spent on guerrilla battles in the House of Representatives.

GlobalFoundries was formed in part through acquisitions of factories formerly owned by chipmaker Advanced Micro Devices, also known as AMD, and IBM. The company held an initial public offering in October and is investing heavily in expanding production.

Although 89 percent owned by the Abu Dhabi government, GlobalFoundries makes secret chips for the Pentagon at factories in Vermont and upstate New York. It has a large-scale plant near Albany, New York that is slated to double production, hopefully with grants from a Congressional funding package if approved, Mr Hogan said.

Making chips in America was definitely part of the relationship with Ford, he said. “There is an aspect that says,” While we are reinventing the ways of making semiconductors, let’s also solve another problem by placing them on land. “

The $ 500 billion semiconductor industry supply chain is extremely complex, especially for ICs used in automobiles. Key suppliers include NXP Semiconductors and STMicroelectronics in Europe, Renesas Electronics in Japan, and Onsemi and Microchip Technology in the United States. These companies own the chip factories they design, but they also outsource some of the production.

Automakers have historically relied on an additional middleman group of so-called Tier 1 companies that buy chips to develop modules to perform specific functions in cars, such as controlling engines and transmissions.

Hendel Jones, who heads chip consultancy International Business Strategies, says he has advised automakers to reach out to fast-growing Silicon Valley companies like Apple, which develops some of its core chips and advises others on both design and manufacturing.

“They will go to foundry suppliers to make sure manufacturing facilities are protected,” Mr. Jones said in a recent interview.

Infineon Technologies, a Munich-based chipmaker that is a leading supplier to the automotive industry, has partnered with Volkswagen and Hyundai to develop semiconductors that increase the range and shorten charging times for electric vehicles. He is also among the chip makers working with General Motors.

Ford and GlobalFoundries have said they plan to continue discussions on specific ways to increase chip production in the United States. They declined to provide details or say whether Ford could invest in a new semiconductor plant with GlobalFoundries.

Thomas Caulfield, chief executive of GlobalFoundries, said the agreement will foster innovation and “ensure the long-term balance of supply and demand.”

The shortage of chips in the auto industry stems from the outbreak of a pandemic, when auto factories closed for about two months to prevent the spread of the coronavirus among workers. At the same time, sales of computers and game consoles have skyrocketed, and tech companies have increased orders for semiconductors. When automakers resumed production, chip suppliers had little manufacturing capacity.

Ford was hit particularly hard earlier this year, as a chip factory owned by one of its key suppliers was closed in a fire. In the second quarter, the company was able to produce roughly half the number of cars it originally estimated, although the chip supply has steadily improved since then.

Jack Ewing made reporting.

World Nation News Deskhttps://www.worldnationnews.com
World Nation News is a digital news portal website. Which provides important and latest breaking news updates to our audience in an effective and efficient ways, like world’s top stories, entertainment, sports, technology and much more news.
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