Global Foundries Inc (GFS)

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General Motors signs deal with GlobalFoundries for exclusive U.S. semiconductor production
PUBLISHED THU, FEB 9 202311:30 AM ESTUPDATED 3 HOURS AGO
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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 deal could be a framework for other deals for GlobalFoundries, according to Caulfield. It provides the best economics for both companies and a road map for future materials needed to produce the chips.

“This is a first-of-a-kind deal, not a last of its kind. This is a solution to a problem,” he told CNBC. “We believe it’s a framework for others to leverage as well.”

Caulfield said the exclusive production for GM is expected to take two to three years to really ramp up.

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 further into their supply chains in an attempt to better secure parts for their vehicles.

Semiconductor 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. Higher-priced vehicles with advanced safety and infotainment systems have far more than a base model, including different types of chips.

The origin of the chip shortage dates to early 2020 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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https://www.cnbc.com/2023/02/09/general-motors-globalfoundries-strike-semiconductor-deal.html