GM reaches computer chip supply deal with GlobalFoundries

With the global shortage of semiconductors still crimping U.S auto production, General Motors has signed a deal with chipmaker GlobalFoundries to dedicate part of an upstate New York factory to supply the automaker.

In a joint statement from the companies Thursday, Malta, New York-based GlobalFoundries said it will expand production capacity inside its Malta plant exclusively for GM’s supply chain.

The factory would supply finished computer chips to GM parts suppliers that manufacture computer modules to control everything from transmissions to brakes to radios.

GM said the deal is for a “long term,” but the company wouldn’t say how long the agreement lasts. The companies also wouldn’t say how many wafers would be produced or release financial details.

“It’s a partnership that includes investment from both sides,” GF spokeswoman Laurie Kelly said. It will take at least two years for the chips to start flowing as the company installs equipment and chips are designed, she said.

New vehicles now have more than 1,000 chips in them, and that need will only grow with automated driving systems and connectivity that will be expanded in the coming years. GM and other automakers hope to make millions from selling software packages to customers, and chips will be needed to support those.

Doug Parks, GM’s head of purchasing and product development, said in the statement that the company expects to double its need for semiconductors over the next several years “as vehicles become technology platforms.”

At the same time, GM, the largest automaker in the U.S., is trying to reduce the number of unique chips in each vehicle so the ones used by the company can be produced in higher volumes.