Ford And GM Will Develop Their Own Microchips To Combat Shortages
Chips Ahoy!
Photo by Tim Mossholder on Unsplash
Please note Ford, GM Step Into Chip Business.
Ford on Thursday morning outlined a strategic agreement with U.S.-based semiconductor manufacturer GlobalFoundries Inc. to develop chips, a pact that could eventually lead to joint U.S. production.
GM later said it was forging ties with some of the biggest names in semiconductors—including Qualcomm Inc. and NXP Semiconductors NV—and has agreements in place to co-develop and manufacture computer chips.
“We feel like we can really boost our product performance and our tech independence at the same time,” said Chuck Gray, Ford’s vice president of vehicle embedded software and controls.
Part of the agreement with GlobalFoundries is intended to enhance near-term chip supplies for Ford, which has been hit especially hard by the supply crunch relative to many other auto makers. The joint-development work is aimed at producing higher-end chips that would go into vehicles several years out, Mr. Gray said.
Building a serious chip-design operation will be far from a simple undertaking for Ford. Designing sophisticated semiconductors with their minute transistors is a difficult discipline that typically takes companies years to master.
Even before the pandemic jacked up demand for chips, semiconductor companies were complaining of an acute shortage of qualified engineers. Ford will be competing for talent not just against chip companies like Intel and Nvidia Corp. , but also deep-pocketed tech companies like Amazon.com Inc. and Apple Inc. that are increasingly designing chips in house.
Bottleneck Issues
One key problem for automakers is they need older chips.
The existing manufacturers do not want to ramp up production or make capital investments for chips that will soon be unneeded and useless.
The automakers are reluctant to use newer chips over testing concerns.
What manufacturer wants a recall of all their vehicles due to some unforeseen chip issue?
Time Time Time
With a tip of the hat to Simon and Garfunkel, I wonder: By the time manufacturers ramp up old chips, will they even be needed?
Time, time time, see what's become of me
While I looked around for my possibilities
I was so hard to please
Don't look around
The leaves are brown
And the sky is a hazy shade of winterSeasons change with the scenery
Weaving time in a tapestry
Won't you stop and remember me
At any convenient time?
GM's Goal - Eliminate Chips
GM also wants to reduce the number of unique microprocessors needed to power increasingly complex and tech-laden vehicles by 95%. To do this, it plans to develop with partners three core families that use similar architectures, Mr. Reuss said. These chips can then be produced in higher volumes and offer better quality and predictability, he said.
GM's long-term goal is to get rid of 95% of the chip designs and get rid of older chips entirely while having no chip design experience.
GM's short-term goal is to ramp up production of chips that will soon be obsolete.
Time will tell how this strategy will work out.
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The intrinsic problem is that for various dmented reasons the semiconductor industry is constantly changing, constantly seeking to put more logic into a smaller space. The problem is that each generation of reduced size requires new production equipment for the different processes, and this new equipment is horribly expensive and slow to arrive. In addition, there is no way to make the production any faster than it already is. So increased production capability is very expensive, and very likely to be slightly obsolete the day it is delivered. And by that time the demand will be for the next generation. And of course the Chip makers do not want to continue producing the older versions because the profit is not as great, and by not producing them they can force the adoption of the newer generation.
What do you think about the situation now?
Excellent comment as always, William K.
And they can do it!! 👏👏👏👏👏