GM signs exclusive agreement for semiconductor production in the US

General Motors has signed an agreement with technology maker GlobalFoundries to manufacture semiconductors for several of its electronics suppliers. Electronic components will be manufactured at GlobalFoundries’ facilities in upstate New York.

Semiconductors are an important component of electronic parts, such as the computer modules needed to make automobiles.

Disruptions in the supply of computer parts, such as microchips or semiconductors, have caused problems in auto manufacturing in recent years, leading to reduced supplies of new vehicles and high prices for new cars, trucks and SUVs.

GM’s direct relationship with GlobalFoundries will give the automaker a secure supply of chips and help control costs, said CEO Thomas Caulfield. GM won’t have to pay profit margins to its parts suppliers for making semiconductors.

It’s an unusual deal in which GM is contracting directly with a company that will provide manufacturing services to companies that, in turn, supply parts to the company.

Under this agreement, the various electronic component makers that manufacture parts for GM will use GlobalFoundries to manufacture semiconductors for them. As a manufacturer, GlobalFoundries can make semiconductors of any design for a variety of different customers, Caulfield said.

“It’s the capability they want in the technology they want, where they want it at the best economics,” Caulfield said in an interview with CNN .

GlobalFoundries announced last July that it would expand its manufacturing capabilities around the company’s headquarters in Malta, New York.

The company also has semiconductor manufacturing capabilities elsewhere in the United States, including Essex Junction, Vermont, and in other parts of the world, such as Germany and Singapore.

last summer [no hemisfério Norte]the federal government passed legislation to increase manufacturing of computer chips in the United States so that companies could import fewer computer components from China.

The deal is also part of GM’s overall plan to reduce the number of different chips needed to build vehicles. The company’s shares rose 2% after the announcement.

“The supply agreement with GlobalFoundries will help establish a strong and resilient supply of critical technology in the United States that will help GM meet this demand while providing new technologies and capabilities to our customers,” Doug Parks, GM’s executive vice president in charge of purchasing and supply chain said in an announcement.

The companies declined to say how much cash or how many semiconductors are involved in the deal. They also didn’t say how long the deal lasts, other than describing it as “long term”.