Biden Gathered Directors of GM, Ford, Google, and Intel to Offer $ 50 Billion to the Semiconductor Industry

Semiconductor manufacturers in the United States may be eligible for tax breaks to ramp up production of chips for the automotive industry and other technology. Intel is preparing to help supply chips for automakers.

On Monday, a three-hour online conference was held with President Joe Biden, economic adviser, national security adviser and secretary of commerce Gene Raimondo, as well as more than a dozen representatives from various companies.

The meeting focused on measures to tackle the semiconductor shortage that leaves automaker factories around the world idle, as well as discussing the automotive industry’s transition to clean energy, job creation, and US economic competitiveness.

Joe Biden attaches great importance to an issue that is detrimental to the country’s technology industry, and the limited domestic semiconductor production is viewed as a national security issue.

CNBC cited data from the Semiconductor Industry Association, according to which the US share in world semiconductor production is only 12%, up from 37% in 1990. However, at the same time, the country’s government does not take measures such as tax breaks and subsidies for companies in this industry.

During Monday’s meeting, Biden read out a letter from 23 senators and 42 members of the House of Representatives, which supported his proposal to allocate $ 50 billion for the production and development of semiconductors. According to a White House spokesman, the administration intended to provide this funding as part of the infrastructure plan in the amount of $ 2.25 trillion.

However, many lawmakers supporting additional funding for semiconductors believe that the measure could be approved in a separate bill on the competitiveness of American companies against China, rather than as part of Biden’s infrastructure plan. A bill like this has some bipartisan support and could be passed faster by Congress.

Senate Majority Leader Chuck Schumer said in February, “semiconductor manufacturing is a dangerous weakness in our economy and our national security.”

Among the negotiators were CEOs of General Motors (GM), Ford Motor (F), Google’s parent company Alphabet (GOOG, GOOGL), new gen. Intel Director (INTC) Pat Gelsinger, Dell (DELL), HP, Micron Technology (MU), Taiwan Semiconductor Manufacturing (TSM), AT&T (T), Samsung Electronics and others.

Taiwan’s largest contract chip maker, TSMC, has received incentives from the US government to begin construction of a $ 12 billion plant in Arizona this year.

“TSMC is confident that our advanced 5nm manufacturing plan in Phoenix, Arizona – one of the largest FDI in US history – will be successful in partnership with the United States government,” the company said in a statement.

Intel should become the largest domestic chip maker that will expand its production in the United States. Late last month, Intel announced plans to build two new chip factories in Arizona.

After the online summit on Monday, Gen. Intel CEO Gelsinger told Reuters: “We hope that some of these problems can be solved in six months, using the capacity of our existing plants, without waiting for three to four years to build new ones. We have already started these negotiations with some of the key component suppliers. “

The head of the Automotive Innovation Alliance, which represents the vast majority of automakers operating in the US, Bozzella urged the Biden administration to adopt policies that encourage US manufacturers to produce semiconductors in the country, including an investment tax credit that could “help companies offset the cost of building new lines at existing facilities. or the reallocation of current production to meet changing needs. “

Earlier, GM said it expects semiconductor shortages to reduce its operating income by $ 1.5 billion to $ 2 billion this year, while Ford estimates losses from the situation at $ 1 billion to $ 2.5 billion. 2021 year.

According to the Alliance for Auto Innovation, an industry group representing American car manufacturers, a chip supply crisis could mean 1.3 million fewer cars were produced in the United States than in 2020, or about 10% of all cars produced in the United States. …

Consulting firm AlixPartners has calculated that the deficit will cost the global auto industry at least $ 60.6 billion this year.

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