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Ford Will Redesign Components, Alter Strategy Amid Chip Shortage

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It’s no secret that the semiconductor chip shortage has severely impacted automotive production all over the world, forcing automakers to slash output in massive quantities. And while chips aren’t the only problem with the automotive supply chain at the moment, Ford is working to ensure that it won’t face a repeat of this dire situation in the future. Most recently, the automaker admitted it was rethinking its supply chain strategy, and now, Ford CEO Jim Farley has said that the company will also redesign components to work with chips that are more accessible in the future.

“Not only are we redesigning a lot of our components to work with chips that are more accessible, but we think we need to look at buffer stocks, actual direct contracts with some of the foundries,” Farley said during Ford’s 2021 shareholders meeting, according to Reuters. “We think that’s going to be a really critical approach to our supply chain as we get more electronic components.”

Farley noted that the majority of chips that Ford currently uses in its vehicles – around 60 percent – are “mature nodes,” which are 55 nanometers or larger. These also happen to be the chips that are facing the biggest shortage at the moment. Redesigning its components to work with more readily available chips would help alleviate the automaker’s production woes.

In addition to announcing his intentions to redesign components, Farley also stated his desire to buck the old “just in time” supply chain practice by stocking up on chips in the future and cutting out the proverbial middle man by purchasing them directly from the companies that make them – not suppliers, as is currently the case – as well as those that construct the wafers used in the chips themselves.

We’ll have more on Ford’s future strategies soon, so be sure and subscribe to Ford Authority for 24/7 Ford news coverage.

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Written by Brett Foote

Brett's lost track of all the Fords he's owned over the years and how much he's spent modifying them, but his current money pits include an S550 Mustang and 13th gen F-150.

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3 Comments

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  1. Most do not realize, and this article hints at it, that anything in electronics have a limited life time of production. As technology and product improves, older chips are discontinued and the electronic components are in constant state of change. Another issue is there are chips manufactured for specific customers for particular features. Recently GM has removed the AFM feature and placed a $50 credit on its Build and Price web sites. Once the chips are available and boards are manufactured, the feature will return.

  2. 55nm chips were introduced in 2007. Ford isn’t seriously using 14 year old chips, are they? For reference, Apple’s latest M1 chip uses a 5nm process.

  3. Chips are the biggest problem. Y’all remember when vehicles didn’t need ‘chips’, had manual windows/transmissions?
    Why’s this so hard to figure out Farley?

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