US chip industry calls on Biden to fund factories

US chip industry calls on Biden to fund factories

A group of US chip companies, including Intel, has sent a letter to the US president, Joe Biden on Thursday [February 11] urging him to provide ‘substantial funding for incentives for semiconductor manufacturing’ as part of his economic recovery and infrastructure plans.

CEOs of major US firms such as Intel Corp, Qualcomm Inc, Micron Technology Inc and Advanced Micro Devices Inc signed onto the letter, according to Reuters.

This happened as a global chip shortage has idled factory lines at Ford Motor Co and General Motors Co, with executives of automakers predicting billions in lost profit.

Scarce chip supplies have made it hard for consumers to buy popular gaming consoles such as Microsoft Corp’s Xbox and Sony Corp’s PlayStation. It has also hampered several automakers’ vehicle output.

Chips are mostly manufactured in countries such as Taiwan and Korea, which have come to dominate the industry.

The US share of semiconductor manufacturing dropped from 37% in 1990 to 12% today, said the letter sent by the Semiconductor Industry Association.

“This is largely because the governments of our global competitors offer significant incentives and subsidies to attract new semiconductor manufacturing facilities, while the US does not,” the group said.

Lawmakers must still decide how much funding to provide. The US chip group urged Biden to provide funding in the form of grants or tax credits.


Global motor industry cuts production as chip shortage continues

Picture: Unsplash