Ford, GM sign memory supply agreements with Micron

Dive Brief:

• Ford Motor Co. and General Motors each signed supplier agreements with Micron Technology this month to support next-generation vehicle production.
• For GM, Micron will provide low-power double-data-rate memory, NOR and universal flash storage NAND products, per a July 1 press release. Additionally, the automaker will collaborate with Micron on future memory and storage requirements.
• Micron will supply Ford with memory and storage technology, although it did not detail specific products in a press release announcing the agreement. The company declined to share more details when reached by Supply Chain Dive.

Dive Insight:

Ford and GM are supporting two key priorities by strengthening their source of supply for memory and storage, namely pushing to produce more technologically advanced vehicles while de-risking supply chains.

This year, Ford unveiled a new “Production Creation and Industrialization” unit meant to lead an expansive rollout of product, software and services in the coming years. The automaker aims to include updated electrical architecture, self-developed hardware and over-the-air software capabilities in 90% of its vehicles by 2030.

Similarly, GM has been advancing a future-focused technology strategy for its vehicle production, including developing a next-generation computing architecture that it expects to deliver an up to 35x improvement in AI performance compared with previous platforms. The system combines propulsion, steering, braking, infotainment and safety on one network and is expected to launch in 2028.

“Our expanded collaboration with Micron strengthens our access to critical memory technologies while enabling deeper integration across our vehicle platforms, supporting both performance and long-term reliability,” Mary Barra, chair and CEO of General Motors, said in a statement.

Numerous manufacturers are contending with a memory sourcing crunch as artificial intelligence applications and the data centers that support them gobble up supply. This is particularly true for automakers leaning into software-defined vehicles.

“Demand from AI applications is absorbing significant volumes of memory chips, which places automotive suppliers and OEMs, especially those with smaller volumes, at the back of the queue,” Andrei Quinn‑Barabanov, supply chain industry practice lead at Moody’s Analytics, said in an interview with WardsAuto this year. “When you are at the end of the line, you have very limited bargaining power and are often forced to accept higher prices, significantly cutting into your profit margins.”

Through these latest memory sourcing deals, Ford and GM are avoiding such risk by securing long-term supply reliability, according to Sanjay Mehrotra, president and CEO at Micron.

As the automakers ready their supply chains to support vehicles with advanced tech, they have both been keen on bringing production closer to their domestic customer base. For example, GM is currently investing $4 billion in its assembly plants across three states and shifting production of the Buick Envision from China to the U.S. by 2028. Meanwhile, Ford last year announced plans to invest $2 billion into domestic manufacturing at its assembly plant in Louisville, Kentucky.

Micron is mirroring the focus on domestic production. The company will support these latest supplier agreements with its ongoing efforts to expand and localize supply, per a press release, including a $2 billion investment in modernizing a plant in Manassas. Virginia.

“Producing the high-volume vehicles of the future in the U.S. will require a resilient supply chain,” Jim Farley, president and CEO of Ford, said in a statement. “We applaud Micron’s commitment to manufacturing in America, expanding its domestic production and investing in a skilled workforce.”