The chip shortage has become one of the biggest challenges for tech companies and auto manufacturers. The lockdowns resulting from Covid-19 are said to be the reason behind recent shortages. In the post-lockdown era, semiconductor manufacturers can’t meet the volume of demands of different companies. While companies like Intel and TSMC are investing in building new facilities to accelerate production, the chip shortage seems like it will last until 2024. The US government is now introducing a $280 billion bill to financially support semiconductor manufacturers in the country. The bill also provides US domestic chip manufacturers with $52 billion in tax credits and funding.
Joe Biden signs the CHIPS and Science Act to support chip manufacturing in the country
The Senate first approved the CHIPS and Science Act on a 64-33 vote; then, the House gave the final approval with a 243-187 vote. President Biden has signed the bill, and US chip manufacturers can wait to receive funds. According to president Biden, “America invented the semiconductor, but over the years, we let manufacturing of semiconductors move overseas. As we saw during the pandemic, when the factories that make these chips shut down, the global economy came to a screeching halt, driving up costs for families.” The semiconductor industry is the new battleground between the United States and China. Both Washington and Beijing governments have plans to boost chip manufacturing. However, these supports won’t solve the chip shortage problem in the short term because it takes a heck of a time to build new production facilities. The chip shortage is also affecting automobile manufacturers. Some brands like Mercedes and Ford had to cut production because they couldn’t provide enough chips for their cars. Due to the lack of chips, BMW also launched some of its new vehicles without Android Auto and Apple CarPlay. “A third of the core inflation last year was due to the high price of automobiles, which was driven by the shortage of semiconductors. For the sake of our economy, jobs and national security, we have to make these semiconductors in America again.” Biden said.
