The world is faced with a global chip shortage. Semiconductor chips are used in the production of virtually everything that electricity runs through; from smartphones to computers, electric toothbrushes, and even cars. The global shortage in semiconductor chips is a result of the coronavirus pandemic, the increasing demand for electronic devices, and sanctions against Chinese Technology companies by the U.S. Government.
As a way of fighting the global shortage of chips, globally renowned companies like Microsoft Corp, Apple Inc, Amazon, and Alphabet’s Google have joined chip-makers such as Intel Corp to form a new group. The aim is to push for Government chip manufacturing subsidies.
The newly formed group is going by the name Semiconductors in America Coalition. The group announced on Tuesday that it has formally asked U.S. lawmakers to provide funding for the CHIPS for America Act, for which the U.S. President; Joe Biden has requested Congress to make $50 billion available.
In a letter the group sent to Democratic and Republican leaders in both houses of the U.S. Congress, the group stated the benefit the funding would bring. “Robust funding of the CHIPS Act would help America build the additional capacity necessary to have more resilient supply chains to ensure critical technologies will be there when we need them”, the letter read.
The effects of the global chip shortage are quite huge with many companies like Ford saying that they most likely would have to reduce production by at least 50 percent.
In a recent interview with Handelsblatt newspaper, the founder of Dell Technologies; Michael Dell said that the ongoing shortage in chips needed for electronic devices may persist for a few years. His company is one of the biggest buyers of semiconductor chips with an order volume of $70 billion annually.
The list of companies that have joined the Semiconductors in America Coalition is quite long. Companies like Hewlett Packard, General Electric, AT&T, Cisco Systems. Verizon Communications Inc., Apple Inc., Intel Corp, etc.
The Auto industry has been demanding that the Biden administration provide some form of security for companies in the industry. The coalition has also cautioned that the Government should bring any plan that will favor only one industry such as the auto industry to an end. “Government should refrain from intervening as the industry works to correct the current supply-demand imbalance causing the shortage”, the group said.