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GM makes key U.S. microchip deal with GlobalFoundries

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General Motors on Thursday said it has reached a long-term agreement with semiconductor maker GlobalFoundries to increase its future supply of U.S.-made microchips.

The companies said GlobalFoundries will produce components for GM’s chip suppliers at its upstate New York headquarters and semiconductor manufacturing site. GM said the partnership is intended to help the automaker reach its goal of using fewer unique chips in its vehicles, resulting in higher-volume chip output and improved supply predictability.

Production is likely at least several years away, given the time it generally takes to get such projects off the ground. The companies did not release specific details about timing or financial elements.

“We see our semiconductor requirements more than doubling over the next several years as vehicles become technology platforms,” Doug Parks, GM’s executive vice president of global product development, purchasing and supply chain, said in a statement. “The supply agreement with GlobalFoundries will help establish a strong, resilient supply of critical technology in the U.S. that will help GM meet this demand, while delivering new technology and features to our customers.”

The deal will create “a dedicated capacity corridor exclusively for GM’s chip supply,” the companies said in their joint statement.

GM executives have said the automaker plans to cut the number of unique microchips it needs by 95 percent and that it has partnered with a number of semiconductor companies, including Qualcomm Technologies, TSMC and Renesas Electronics Corp.

GlobalFoundries said it is working on other long-term agreements with new and current customers while it also works to expand its capacity.

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