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After interrupting vehicle manufacturing and closing factories in Brazil, Ford enters the chip market to increase competition and end the production crisis in the automotive market

Written by Flavia Marinho
Published 22/11/2021 às 09:35
Ford - engines - production - price - chips - semiconductors

Ford boss says that initiative represents "just the beginning" of the business and is part of the company's supply strategy plan to end the production crisis.

After interrupting vehicle manufacturing and closing factories in Brazil, in recent months, Ford had to significantly reduce its production, generating economic losses of millions, due to the shortage of semiconductor chips that generated a crisis that affected numerous companies from different sectors of the technological field.

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To solve this problem, Ford Motors announced a strategic agreement with GlobalFoundries (GF), a company dedicated to the design and production of semiconductors. In this way, it is expected to guarantee the supply of chips, presenting the opportunity to design exclusive chips for the automaker.

Ford President and CEO Jim Farley said in a statement that the supply deal with New York-based GF represents "just the beginning" of the deal and is part of the company's plan to "vertically integrate key technologies and capabilities” although that announcement did not reveal financial details or the date when GlobalFoundries would start supplying semiconductor chips to the automaker. These chips would be used for advanced driver assistance, battery management and networking systems.

"It's critical that we create new ways of working with suppliers that give Ford and the United States greater independence to produce technologies and features that our customers will value most in the future," Farley said in the statement. Both companies claimed that such an agreement will allow GF "to create an augmented supply of semiconductors for the current range of Ford vehicles" as well as the possibility of "joint research and development" to respond to the demand for chips for the automotive sector.

The shortage didn't just affect Ford.

Far from being a problem for a single company, the shortage of chips has had consequences for countless companies and has caused different sectors to take action on the matter. In the same vein, so far this year, US President Joe Biden has announced measures to increase production of semiconductor chips in that country.

According to a report published in September by the consultancy AlixPartners, the shortage of chips aggravated by the pandemic will cost the automotive sector around 210.000 million dollars globally and will cause 7,7 million vehicles to be produced less than expected. Given this scenario, the need for components becomes increasingly urgent and the measures taken are a viable solution, but the sector's recovery will be slow, which according to the company, will not be seen until at least the second quarter of the following year. and “probably stretches out a bit further.”

Flavia Marinho

Flavia Marinho is a postgraduate engineer with extensive experience in the onshore and offshore shipbuilding industry. In recent years, she has dedicated herself to writing articles for news websites in the areas of industry, oil and gas, energy, shipbuilding, geopolitics, jobs and courses. Contact her for suggestions, job openings or advertising on our portal.

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