Ford struck a deal with recently public contract chip manufacturer GlobalFoundries to secure enough semiconductors for its auto production amid a shortage, it announced Thursday.
The two companies said the deal would help Ford secure more chip supplies for its current products and includes joint research and development projects to address the increased demand for chips in cars thanks to features such as assisted driving and for electric vehicles. Those are two of the most significant contributors to the rise in demand for chips in autos.
"This agreement is just the beginning, and a key part of our plan to vertically integrate key technologies and capabilities that will differentiate Ford far into the future," Ford CEO Jim Farley said.
Neither company disclosed the financial terms of the deal.
The auto industry has been severely damaged by the global shortage for chips, which may cost the industry $210 billion in lost revenue, according to AlixPartners. Thursday's agreement is another sign of how a range of businesses have been upended by the surge in demand for chips. Before the COVID-19 pandemic, an agreement between an automaker and a chip manufacturer would have been quite surprising.
GlobalFoundries had a lackluster debut on Wall Street last month, after its controlling shareholder, Mubadala Investment Company, elected to take the company public. Mubadala is an arm of the Abu Dhabi government, and continues to retain a controlling stake in GlobalFoundries.