Magical Trade
Friday, January 27, 2023
  • Home
  • Trade News
  • Email Whitelisting
  • Privacy Policy
No Result
View All Result
  • Home
  • Trade News
  • Email Whitelisting
  • Privacy Policy
No Result
View All Result
Magical Trade
No Result
View All Result
Home Trade News

Ford Dropped a Bombshell on Chips. GlobalFoundries Stock Is Taking Off.

by
November 19, 2021
in Trade News
0
0
SHARES
0
VIEWS
Share on FacebookShare on Twitter
Text size

Chip shortages have disrupted the auto industry since early this year.

David Paul Morris/Bloomberg

A global semiconductor shortage has constrained auto production all year, creating production—and stock market—volatility for the entire automotive sector.


Ford Motor

is taking new steps to minimize the impact on its operations.

RELATED POSTS

Walmart, CVS Health adjust pharmacy hours amid labor crunch

Three arrested in plot linked to Iran to assassinate U.S. journalist, DOJ says

Ford (ticker: F) and


GlobalFoundries

(GFS) on Thursday announced a collaboration to manufacture automotive semiconductors in the U.S. The alliance shows that after their difficult 2021, car companies want more control over the supply of chips that enable almost all of the features common on new automobiles.

Car companies have long made their own transmissions and engines. The latest deal continues a trend in which they are expanding that vertical integration to include the parts vital to their future as producers of smart, electric vehicles. A number of companies have announced plans in 2021 to spend heavily on supplies of electric-vehicle batteries.

That includes Ford. Back in September, Ford announced new battery and assembly facilities going into Kentucky and Tennessee. The new facilities will cost more than $11 billion and include enough battery production to power about 1 million EVs each year. Ford battery partner


SK Innovation

(096770. Korea) will kick in about $4 billion of the total.

MORE TO read

While battery partnerships are becoming common, semiconductor partnerships are still new, no shock given that the shortage took manufacturers by surprise. Most industries, including cars and chips, didn’t expect the surge in demand that has come with the easing of the pandemic, and many manufactures reduced their inventories to conserve cash when the crisis was at its worst. One-off factors such as a fire at a Japanese supplier have added to the trouble.

Equally important, newer cars need increasing amounts of chips. “We see the semiconductor requirements more than doubling over the next several years as the vehicles that we produce become more of a technology platforms,” said


General Motors

(GM) President Mark Reuss at a Thursday investment conference. He didn’t address partnerships like the one Ford entered into Thursday, but he listed many chip makers that GM is working with to ensure access to chips while reducing complexity.

“It’s critical that we create new ways of working with suppliers to give Ford—and America—greater independence in delivering the technologies and features our customers will most value,” said Ford CEO Jim Farley in a statement. “This agreement is just the beginning, and a key part of our plan to vertically integrate key technologies and capabilities that will differentiate Ford far into the future.”

It appears to be a smart move, but Ford stock isn’t reacting all that much. Shares initially inched up, but was down about 2.5% in late day trading. The

S&P 500
was up 0.2%. The

Dow Jones Industrial Average
is flat.

Coming into Thursday trading, however, Ford stock was up more than 125% year to date and more than 25% over the past month. A better-than-expected third- quarter earnings report helped propel shares higher in recent weeks.

GlobalFoundries stock was the one on the move Thursday. Its shares were up more than 5% in midday trading, though by afternoon the gain had faded to about 2.5%.

“GF is committed to building innovative alliances with the world’s leading companies,” said GlobalFoundries CEO Tom Caulfield in the statement. “Our agreement with Ford is a key step forward in strengthening our cooperation and partnership with auto makers to spur innovation, bring new features to market faster, and ensure long-term, supply-demand balance.”

GlobalFoundries makes semiconductors designed by others. It has manufacturing capacity all over the world, including in the U.S.

The new alliance doesn’t involve cross ownership stakes between the firms. It will deal with semiconductor supply as well as joint research and development to address the growing demand for more complicated chips as cars become electrified—and smarter.

Write to Al Root at allen.root@dowjones.com

ShareTweetPin

Related Posts

Walmart, CVS Health adjust pharmacy hours amid labor crunch

by
January 27, 2023
0

In this article WMTCVS Follow your favorite stocksCREATE FREE ACCOUNT A woman shops in the pharmacy area of a Walmart...

Three arrested in plot linked to Iran to assassinate U.S. journalist, DOJ says

by
January 27, 2023
0

U.S. Attorney General Merrick Garland announces that the U.S. Justice Department has filed an anti-trust lawsuit against Alphabet's Google over...

White House approves more than 16 million people for contested student loan forgiveness plan

by
January 27, 2023
0

Wirestock | Istock | Getty Images The U.S. Department of Education has "fully approved" more than 16 million people for...

Goldman predicts clean hydrogen will be a $1 trillion market. Here’s how to play it.

by
January 27, 2023
0

In the race to reduce global carbon emissions to zero, clean hydrogen is increasingly expected to be a winner. Hydrogen...

What is a ‘rolling recession’ and how does it affect consumers? Economic experts explain

by
January 27, 2023
0

By most measures, the U.S. economy is in solid shape. Although the first half of 2022 started off with negative...

Next Post

The Great Resignation is being driven entirely by this one demographic

FDA clears Moderna and Pfizer's Covid vaccine booster shots for all U.S. adults

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

email

Get the daily email about stock.

Please Enter Your Email Address:



By opting in you agree to our Privacy Policy. You also agree to receive emails from us and our affiliates. Remember that you can opt-out any time, we hate spam too!

MOST VIEWED

  • Fund manager believes FAANG is dead — says now it’s all about MANTA

    0 shares
    Share 0 Tweet 0
  • Forget Tesla — this auto stock is the one to buy right now, analyst says

    0 shares
    Share 0 Tweet 0
  • Bank of America names its top global tech stocks — including one it says has upside of 100%

    0 shares
    Share 0 Tweet 0
  • Josh Brown says Nvidia’s potential is ‘scary’ ahead of a potential AI boom

    0 shares
    Share 0 Tweet 0
  • Cut Your Retirement Spending Now, Says Creator of the 4% Rule

    0 shares
    Share 0 Tweet 0
  • Home
  • Trade News
  • Email Whitelisting
  • Privacy Policy
All rights reserved by www.magicaltrade.net
No Result
View All Result
  • Email Whitelisting
  • Home
  • Privacy Policy

All rights reserved by www.magicaltrade.net