General Motors Co. and GlobalFoundries are forming a long-term agreement to give GM a dedicated supply of a critical part on semiconductors, the companies announced Thursday.
Through what's called a "first-of-its-kind agreement," GF will manufacture wafers and direct them to GM's semiconductor suppliers for the automaker's vehicles. Production of the wafers will take place at GF's semiconductor facility in upstate New York. Timing on when GF will produce GM's supply for chips was not released. GM and GF also did not disclose financial terms of the agreement.
Since late 2020, automakers have battled a shortage of semiconductors or microchips used throughout a vehicle from the heated seats to infotainment systems. The agreement should help eliminate some of the bottlenecks that led to costly canceled production time. Lack of chips led to weekly production interruptions for automakers throughout 2021 and some downtime in 2022. With the electric vehicle transition and push for more self-driving vehicle technology, automakers will need even more semiconductors.
