Ongoing chip shortage affecting much of auto industry
New US investment could help even out production shortages
It may not help with the immediate and ongoing shortage of microchips, but a new investment from the US government could help stop future shortages. It could also result in seven to 10 new factories in the country, says a new report.
The proposal is for $52 billion in funding to help build more semiconductor chips in the US, a direct response to the current shortage that’s affecting nearly every piece of consumer electronics including slashing automobile and truck production around the world.
U.S. Commerce Secretary Gina Raimondo said on Monday, Reuters reports, that the investment could generate “$150 billion-plus” in chip production as well as research. “We just need the federal money … to unlock private capital,” Raimondo said, adding, “it could be seven, could be eight, could be nine, could be 10 new factories in America by the time we’re done.”
Senator Mark Warner echoed the sentiment, though added that “This is not going to solve this overnight. It will take years for the Commerce Department to make these investments,” according to the report.
Reuters notes that the US had a 37 percent share of semiconductor and microelectronics production in 1990, a figure that has fallen to 12 percent today.
In the meantime, automakers continue to close plants for extended periods, leading to reduced inventory of many of the market’s most popular models. Ford warned that it could lose more than 1 million units of production this year, and that second-quarter profits could be cut in half.