GlobalFoundries has played the “domestic chip manufacturing” card and “better visibility claim” over the supply chain, to establish a new direct source model. And GM bought it.
GlobalFoundries in Malta, New York (Image: GlobalFoundries)
What’s at stake:
Can the automotive industry, hard hit by the global chip shortage, restore order to its chaotic and divided supply chain? General Motors and GlobalFoundries have devised a model they say can provide better visibility for demand and supply. Questions arise: Is the real motive for the new model just to cut out the middlemen? Will chip suppliers have a say? If so, at what cost?
General Motors Co. and GlobalFoundries (GF) have cut a deal. GF, the world’s fourth largest-earning foundry, is establishing a “dedicated capacity exclusively for GM’s chip supply,” while GM makes GF its preferred foundry. The deal compels GM’s semiconductor suppliers to manufacture chips exclusively at GF’s U.S. facility.