Semiconductor companies and large companies that use semiconductor chips have formed a new coalition to provide tens of billions of dollars in federal funding for semiconductor research and manufacture in the United States.
The new group, the Semiconductors in America Coalition, announced its formation Tuesday in the face of a global semiconductor shortage that has disrupted the entire economy. Its members include chip manufacturers such as Intel, Nvidia and Qualcomm as well as companies that rely on semiconductors such as Apple, Google, Amazon Web Services, Microsoft, Verizon and AT&T.
The coalition is calling on Congress to allocate $ 50 billion to research and manufacture semiconductors, which President Biden proposed as part of his $ 2.3 trillion infrastructure package.
“Executives from a wide range of critical sectors of the US economy, as well as a large and non-partisan group of policymakers in Washington recognize the essential role of semiconductors in America’s present and future strength,” said John Neuffer, president and CEO of the Semiconductor Industry Association , a trading group that represents semiconductor companies.
In a letter to the leaders of Congress, the new coalition noted the current shortage of semiconductors and said that providing federal funding in the long run would “help America build the additional capacity it needs to have more resilient supply chains ensure that critical technology is there when we need it. “
The shortage is being felt acutely in the auto industry and is forcing automakers to shut down their plants. Ford Motor expects the shortage will result in a roughly $ 2.5 billion drop in profits this year and cut vehicle production by around 50 percent in the second quarter.
The new coalition does not include automakers who have their own ideas on how the government should promote domestic semiconductor manufacturing. In a letter to Congress leaders last week, groups representing automakers, auto suppliers and auto workers expressed support for Mr Biden’s $ 50 billion proposal, but stressed the need to increase chip manufacturing capacity in automotive quality as part of efforts to increase.
The letters from the American Automotive Policy Council, the Motor & Equipment Manufacturers Association, and the United Auto Workers Union suggested “allocating specific funding to semiconductor equipment that commit to using some of their capacity to manufacture chips for automobiles” .
In a letter to congressional leaders last month, technology trading groups opposed the provision of new manufacturing capacity for a particular industry, saying that such a move would mean “unprecedented market disruption.”