2021 SEMICONDUCTOR CHIP SHORTAGE

The semiconductor chip shortage is far from over but this hasn’t stopped governments around the globe from getting creative to move production ahead. The impact of the chip crisis on the automotive market has been debilitating, resulting in competition between automakers and electronics manufacturers.

- Christy Gren

To prevent the global chip shortage from razing the economy to the ground the U.S. Commerce Secretary Gina Raimondo has proposed a $52 billion boost in U.S. government funding for semiconductor production and research which could result in seven to 10 new U.S. factories.

The government funding would generate “$150 billion-plus” in investment in chip production and research, said Raimondo at an event outside a Micron Technology Inc. chip factory.

“We just need the federal money … to unlock private capital,” Raimondo said, adding, “it could be seven, could be eight, could be nine, could be 10 new factories in America by the time we’re done.” As the semiconductor chip shortage gains momentum and forces industry leaders to look for alternate ways to meet the shortfall. Executives from some of the world’s biggest foundries have agreed to provide priority to automotive chips to meet demand. According to Taiwan’s economics minister Wang Mei-Hua, executives from Taiwan Semiconductor Manufacturing Company (TSMC), United Microelectronics Corp. (UMC), Powerchip Semiconductor Manufacturing Corp. and Vanguard International Semiconductor Corp. have agreed to give priority to auto chips.

In the meantime, automotive titans including General Motors Co., Ford Motor Co., and Toyota Corp. have cut production and idled factories until the troubles go away. The global chip shortage is a historic test for the century-old automotive industry in America as it struggles to shift towards smarter, electric vehicles.