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General Motors has entered the missile manufacturing business, marking an unexpected diversification move that sent shares up 4%. The Detroit-based automaker is expanding beyond its traditional vehicle lineup under CEO Mary Barra's strategy focused on maximising truck and SUV pricing, growing software subscriptions, and diversifying into battery technology and defence contracting. GM shares recently traded between $85–$88, below their July peak of $91.85 but significantly outperforming the consumer discretionary sector, which fell roughly 3% year-to-date through mid-September 2026. The company posted second-quarter 2026 revenue of $48.0 billion, up 1.9% year-over-year, beating analyst expectations. Adjusted earnings per share reached $3.57, surpassing forecasts by 8.5% and marking GM's fourth consecutive quarterly beat. However, GAAP earnings fell 26% year-over-year to $1.41, affected by charges related to EV realignment and China restructuring.

GM locks in Micron chip deal and a $4.5 billion parts reserve to shield production from automotive memory supply pressure. General Motors has signed a long-term semiconductor supply agreement with Micron Technology and separately arranged a facility of up to $4.5 billion to prepay suppliers for critical parts, as the American automaker moves to protect its production lines from growing pressure on automotive memory chip supply. The Micron deal and what it covers. Micron Technology and General Motors announced a Strategic Customer Agreement to secure a long-term, reliable supply of memory and storage platforms critical to GM's vehicle production, the companies said on July 1. Under the agreement, GM will secure supply of LPDRAM, NOR, and UFS NAND products, while the two companies continue to collaborate on future memory and storage technology requirements essential for the next generation of vehicles, including deep technology collaboration to align on future product definition, system-level optimization, and the qualification of advanced memory technologies. Low-power DRAM, NOR flash memory, and universal flash storage chips are used in advanced driver-assistance systems, infotainment, and digital cockpit systems, and demand for automotive-certified memory increased sharply in 2025 and 2026. GM described the agreement as a proactive move to safeguard critical parts of its supply chain rather than a response to any current operational disruptions. The agreement is enabled by Micron's ongoing investments to expand and localize supply for automotive customers, including advanced DRAM manufacturing in Manassas, Virginia. Micron's $2 billion investment to modernize its Manassas fab, which began production earlier this year, provides the longevity and supply output valuable to long product lifecycles and improved supply predictability. Why prices are climbing. Hyperscale AI clusters consume unprecedented amounts of DRAM and flash memory alongside GPUs. The automotive industry is facing a semiconductor supply chain challenge, as memory chips critical to modern vehicles face growing demand in the US for the buildout of AI data centers. As cloud providers accelerate AI infrastructure investment, semiconductor manufacturers are balancing demand from data centers with automotive, industrial, and consumer electronics customers, prompting some industries to secure long-term supply agreements. S&P Global Mobility estimated that automotive DRAM contract prices could rise 70% to 100% in 2026 compared with 2025 levels, warning that the supply of older-generation automotive DRAM is under pressure. For automotive suppliers, the result is greater pricing pressure alongside renewed uncertainty over component availability. The $4.5 billion supplier reserve. GM's Micron agreement was not the only supply-chain hedge the company put in place this year. General Motors entered into a financing arrangement on August 7 with supply-chain management firm Procura Auto Parts LLC, under which Procura will prepay certain GM suppliers so they can acquire and hold inventory set aside for the automaker. The program is intended to secure supply of critical parts in the event of disruptions caused by extreme weather, natural disasters, cyberattacks, demand spikes, or similar events, according to the filing. Problematic parts for the automotive industry have included semiconductor chips, rare earths, and wire harnesses. Procura draws on financing from a bank syndicate that includes JPMorgan Chase Bank, N.A. and Banco Santander, S.A.; GM backs that financing by issuing irrevocable payment undertakings, or IPUs, committing to repay Procura once the inventory has been consumed in production. Interest on outstanding IPUs accrues at the Secured Overnight Financing Rate plus 1.55% per year, payable monthly. The prepayments remain outside GM's adjusted automotive free cash flow until the company itself purchases the inventory. GM has not disclosed which specific parts it is targeting with the facility. Broader industry shift toward direct chip deals. GM is not alone in pursuing locked-in silicon supply. Toyota supplier Denso submitted a bid in February, a move that would have brought Rohm's silicon carbide power semiconductors under the direct control of an automotive player. Denso Corporation withdrew its proposal to acquire Rohm Semiconductor after the two sides failed to agree on valuation and deal terms. Following Denso's withdrawal, Rohm, Toshiba, and Mitsubishi Electric announced in late March discussions toward merging their power semiconductor operations. The flurry of supply deals reflects a structural change in how automakers manage their component pipelines. Vehicles equipped with hands-free driving and remote-access features increasingly depend on the same high-bandwidth memory chips competing with cloud and AI infrastructure for foundry capacity, a tension that makes subscription-linked in-vehicle technology features an added variable when resale values are calculated. The pressure to lock in chip supply also compounds the component risks already visible in high-voltage systems. GM's own Silverado EV battery fire recall this month underscored how component integrity issues anywhere in an electric vehicle's architecture can carry serious consequences. Whether direct OEM-to-chipmaker agreements can keep pace with demand from AI infrastructure, the primary source of the current supply pressure, remains the central question for automakers heading into 2027 model year planning. Hugo Rojas is the editor of GCN. With a Master of Science in Engineering, he specializes in technology, data, and science, and brings a human-centered perspective informed by psychology.