GM, GlobalFoundries sign exclusive US chip supply deal

General Motors (GM) is taking matters into its own hands when it comes to securing those all-important semiconductor chips.

GM and chipmaker GlobalFoundries (GFS) (GF) announced a long-term, direct chip supply deal for GM’s automotive needs. The chips will come from a GF chip facility in upstate New York, which the companies say will fuel a dedicated “capacity corridor” for GM’s chip supply.

“We see our semiconductor requirements more than doubling over the next several years as vehicles become technology platforms,” said Doug Parks, GM EVP of global product development, purchasing and supply chain, 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.”

GM says the agreement supports its strategy of actually reducing the number of “unique” chips needed for its vehicles, but increasing overall supply and adding more predictability to its chip supply.

“GF will expand its production capabilities exclusively for GM’s supply chain, enabling us to strengthen our partnership with the automotive industry and New York State, while further accelerating automotive innovation with U.S.-based manufacturing for a more resilient supply chain,” said Thomas Caulfield, president and CEO of GF.

Malta, NY-based GF had previously said it has invested over $15 billion into its facility in upstate New York, and will likely be investing more for GM’s needs.

Investing in more chip manufacturing is win for President Biden stemming from his CHIPS Act, legislation that will encourage chipmakers to move manufacturing to the U.S. It’s also a win for Senate Majority Leader Chuck Schumer — co-sponsor of the CHIPS act - who has been championing chip making in the state for some time.

“I have long said that Upstate New York’s semiconductor corridor will be a major engine powering America’s technological future, and now ‘Made in New York' chips will help jumpstart the next generation of vehicles for GM across the country,” Sen. Schumer said.

GM and GF did not disclose any details on what kind of investment is being made by both sides, and how many chips the deal will supply while in effect.

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Pras Subramanian is a reporter for Yahoo Finance. You can follow him on Twitter and on Instagram.

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