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szdaily -> World Economy -> 
Tech giants join call for funding US chip production
    2021-05-17  08:53    Shenzhen Daily

SOME of the world’s biggest chip buyers, including Apple Inc., Microsoft Corp. and Alphabet Inc.’s Google, are joining top chipmakers such as Intel Corp. to create a new lobbying group to press for government chip manufacturing subsidies.

The newly formed Semiconductors in America Coalition, which also includes Amazon.com’s Amazon Web Services, said it has asked U.S. lawmakers to provide funding for the CHIPS for America Act, for which President Joe Biden has asked Congress to provide US$50 billion.

“Robust funding of the CHIPS Act would help America build the additional capacity necessary to have more resilient supply chains to ensure critical technologies will be there when we need them,” the group said in a letter to Democratic and Republican leaders in both houses of the U.S. Congress.

A global chip shortage has hit automakers hard, with Ford Motor Co. saying it could halve second-quarter production.

The chip shortage will cost automakers US$110 billion in lost revenues this year, up from a prior estimate of US$61 billion, consulting firm AlixPartners said Friday, as it forecast the crisis will hit the production of 3.9 million vehicles.

The chip crunch has driven home the need for automakers to be “proactive” right now, and create “supply-chain resilience” longer term to avoid disruptions in the future, the firm said.

Automakers are now looking at developing direct relationships with semiconductor makers, said Mark Wakefield, co-leader of AlixPartners’ global automotive practice. “These things are shocked into existence,” he said.

Automotive industry groups have pressed the Biden administration to secure chip supply for car factories. But media reports last week said administration officials were reluctant to use a national security law to redirect computer chips to automakers because doing so could hurt other industries.

The new coalition includes some of those other chip-consuming industries, with members such as AT&T, Cisco Systems, General Electric, Hewlett Packard Enterprise and Verizon Communications Inc. It cautioned against government actions to favor a single industry such as automakers.

Tech companies such as Apple are also being hit by the chip shortage, but far less severely than automakers.

The iPhone maker said last month it will lose US$3 billion to US$4 billion in sales in the current quarter ending in June because of the chip shortage, according to Refinitiv revenue estimates.(SD-Agencies)

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