U.S. chip industry calls on Joe Biden administration to fund factories

Semiconductor Industry Association on Thursday sent a letter to US President Joe Biden urging him to provide “substantial funding for incentives for semiconductor manufacturing” as part of his economic recovery and infrastructure plans.
US president Joe Biden
The chief executives of major U.S. firms such as Intel, Qualcomm, Micron Technology and Advanced Micro Devices (AMD) signed onto the letter.

It comes as a global chip shortage has idled factory lines at Ford Motor and General Motors, with executives at the automakers predicting billions in lost profit. Tight chip supplies have even made it hard for consumers to buy popular gaming consoles such as Microsoft’s Xbox and Sony’s Playstation.

The missing chips are mostly manufactured in countries such as Taiwan and Korea, which have come to dominate the industry. The letter, sent by the Semiconductor Industry Association, said that the U.S. share of semiconductor manufacturing dropped from 37 percent in 1990 to 12 percent today.

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

Congress last year authorized subsidies for chip manufacturing and semiconductor research, but lawmakers must still decide how much funding to provide. The U.S. chip group urged Biden to provide such funding in the form of grants or tax credits.

“Working with Congress, your administration now has an historic opportunity to fund these initiatives to make them a reality,” the chip group wrote. “We believe bold action is needed to address the challenges we face. The costs of inaction are high.”

“By investing in domestic semiconductor manufacturing incentives and research initiatives, President Joe Biden and Congress can reinvigorate the U.S. economy and job creation, strengthen national security and semiconductor supply chains, and ensure the U.S. remains the leader in the game-changing technologies,” John Neuffer, SIA president and CEO, said.