(Bloomberg) — Ford Motor Co. sees a prolonged shortage of mature chips that automakers need for their vehicles.
“It’s too painful. We need to understand your technology roadmap better,” Chief Executive Officer Jim Farley said at the annual Semiconductor Industry Association dinner, in an interview with Texas Instruments Inc. CEO Rich Templeton. “And we need supply chain people from your companies and our companies to get it right.”
Over the past two years, constrained chip supply has cost Ford 1.3 million vehicles in lost production. On top of that, the same issue led Ford to lose 4 million employee workdays this year, the company’s chief said. The parts in question are not cutting-edge silicon but mature technology doing basic tasks. Scarce MOSFET chips — costing just $0.40 apiece — for windshield wipers in the Ford F-150 cost the company 40,000 units of that vehicle’s production, Farley said.
Also in attendance at the San Jose event were Intel Corp. CEO Pat Gelsinger and Nvidia Corp. CEO Jensen Huang.
“One thing that keeps me up at night is legacy nodes,” Farley said, referring to chips built on older manufacturing processes such as those MOSFETs Ford struggled to procure. The challenge for automakers like Ford is that capacity expansion for those production nodes is not proceeding as fast as they would like. He sees the growth in carmakers’ chip demand running at double the speed of capacity expansion from chip fabricators.
“We underappreciated the complexity when we didn’t know,” he said. “We need silicon designers. We can’t do this anymore.”
Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Co., the world’s biggest contract chipmakers, have worked to fill the demand from automakers, but both companies still focus more on growing advanced chipmaking, which yields higher profits.
“Money alone isn’t enough,” Farley said in concluding his remarks. “We have to have the vision and the operational excellence in the whole ecosystem.”
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