Ford and General Motors (GM), the automotive giants, develop stronger ties with semiconductor manufacturers. The move is taken to ensure improved supply of electronic chips since the car industry has been facing a shortage.
Ford has signed a non-binding agreement with a New York-based chipmaker, GlobalFoundaries. Ford said that it “opens the door” for joint research and development and production of chips to supply itself and other U.S. automotive companies in the industry.
GM President commented on the future semiconductor chip demand to investors. He said that as cars and trucks have been becoming electronically more complex, the demand for chips will be more than doubled in the future years. Therefore, GM has been pursuing partnerships with the world’s most valuable chipmaker, Taiwan Semiconductor Manufacturing Company. In addition it also pursued ties with NXP semiconductors, Qualcomm and others.
The need for these tie ups has originated due to lack of semiconductors in the automotive industry. Due to this, the production and manufacturing of vehicles have been hampered, thereby limiting sales of new vehicles. Also, the dearth of demand for cars in the Covid-19 pandemic was reveresed before the companies could expect it. Therefore, the shortage arised.
Ford and GM stocks
Ford’s stocks dipped slightly on November 18, 2021. The stocks opened at $19.96 and closed at $19.56. It showed a slight decline of 2%. Also, the stocks have seen a stagnant growth since the beginning of this month. The stocks closed at $17.95 on November 1. Comparing the figures, we see that its stock surged by a mere 8.96% in the month.
General Motor’s (GM) stock too saw a dip that was more than Ford. The stocks opened at $64.61 and closed 2.28 points lower at $62.33. This showed a decline of 3.53%. Its shares also saw a stagnant growth. The stocks opened at $55.49, Comparing it with today’s figures, it surged by 12.32%.
With new entrants in the automotive industry, the competition for these companies have increased. Earlier this week, Lucid overtook Ford in terms of valuation when it surpassesed the $89.9 billion mark. It would be interesting to see how these tie ups help Ford and GM.