The global semiconductor chip shortage has affected car makers, affecting jobs and car production. (Image Credit: Campbell/Unsplash)
Nine state governors recently delivered a letter to U.S. lawmakers insisting that they pass subsidies for semiconductor factories for car chip production. The governors, including Gretchen Whitmer, urged Congress to pass the $52 billion CHIPS Act, which reserves $2 billion for older tech chips that are currently seeing shortages in the auto industry. Consequently, the shortage impacted 575,000 auto industry jobs and cost auto manufacturers 2.2 million vehicles.
The governors of Wisconsin, Alabama, Illinois, California, Kansas, North Carolina, Pennsylvania, and Kentucky also signed the letter.
According to experts, policymakers can't do very much to boost global chip supply for the short term since it takes years for factories to start operations. Even then, the shortage caused US companies to rely more on-chip manufacturers located in Taiwan.
"The global auto chip shortage has hit Michigan and states across the country hard, idling plants and slowing production, threatening thousands of auto-related jobs up and down the supply chain," Whitmer said in a statement. "With no end in sight, it's clear we have no time to lose if we're going to protect jobs and maintain our competitive edge."
Although the semiconductor funding passed the U.S. Senate this year (68-32) as part of the U.S. Innovation and Competition Act (USICA), it hasn't been approved by the House of Representatives. House members have rejected certain aspects associated with the bill because they worry that research grants could benefit China.
"We understand that the House of Representatives has its own priorities with respect to the policies and programs included in USICA, we hope the two chambers will now come together quickly to find common ground with respect to this legislation, including full funding for the CHIPS Act re-shoring provisions, as soon as possible," the governors wrote.
The chip shortage also impacts other manufacturing industries, such as medical devices, radiation-proof chips as needed by the national defense industrial base, and agricultural machinery.
Additionally, Sony and TSMC partnered up to address the semiconductor chip shortage that affects carmakers, phone brands, etc. These companies plan to build a semiconductor factory in Kumamoto, Japan, for specialized chip production. However, construction is expected to start in 2022, completing just before the end of 2024. The global shortage could be resolved by that time.
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