General Motors reaches deal to ensure its chip supply

General Motors Co. has reached an agreement with a large computer chipmaker to help ensure it has a steady supply of semiconductors as it ramps up production of electric vehicles and complex components that require increases in computing power.

Under the agreement, the chipmaker, Globalfoundries, agreed to set aside a portion of its manufacturing capacity exclusively to make chips for GM.

The automaker plans to introduce more than two dozen electric vehicles around the world over the next two years. Large numbers of chips are used in internal- combustion vehicles as well.

General Motors is increasing the number of vehicles equipped with advanced driver assistance systems that use cameras, radar and other sensors to allow handsfree driving under certain conditions.

“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.

He said the company expected its need for computer chips to double over the next several years. “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,” he added.

Automakers have been struggling with a computer chip shortage for the last two years and at times have had to idle plants while waiting for new supplies of electronic parts. In 2021, Ford Motor Co. reached an agreement with Globalfoundries to collaborate on designing chips to help improve its supplies.