 "Joe Biden")
President Joe Biden has appealed for a big cash infusion to America's semiconductor industry amid an acute chip shortage, including in India, and fears that China might overtake the US in this critical technology.
Semiconductor chips function as the brains of cars, medical equipment, household appliances and electronic devices.
In January, President Biden touted a USD 20 billion investment by American technology company Intel to build a semiconductor factory in Ohio to address a global shortage that has been exacerbated by the COVID-19 pandemic and the US-China trade war.
In his first State of the Union address on Tuesday, Biden urged Congress to pass a law that would provide major federal investment in US-based semiconductor production and other manufacturing projects.
If that federal money comes through, he said, Intel CEO Pat Gelsinger had personally told him the company would quintuple its Ohio investment to USD 100 billion, the National Public Radio (NPR) reported.
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"All they're waiting for is for you to pass this bill," Biden said.
Driven by Washington's desire to retain an edge over China's technological ambitions, the US Investment and Competition Act was passed with rare bipartisan Senate support in June but still needs to be passed by the House of Representatives. It includes full funding for the CHIPS for America Act, which provides USD 52 billion to catalyse more private sector investments in the semiconductor industry, the Voice of America (VOA) reported.
China is doing everything it can to take over the global market so they can try to outcompete the rest of us, Biden said in January.
Seventy-five per cent of the production of the chips takes place in East Asia; 90 per cent of the most advanced chips are made in Taiwan, Biden had said.
The semiconductor industry has been roiled by the pandemic and unable to keep up with demand. It takes years to launch a new facility to produce semiconductors, so the problem has lingered. But as countries race to encourage more computer chip production, some experts are growing concerned that the world may be on track for an oversupply of computer chips once all the new facilities come online, the NPR reported.
The myriad disruptions of the pandemic have raised concerns about the vulnerabilities of a supply chain that relies on seamless global cooperation. And the semiconductor market is dominated by producers in Asia, particularly Taiwan.
The US share of global semiconductor production has fallen from 37 per cent to 12 per cent over the past 30 years, according to government data.
The COVID-19 pandemic and extreme changes in consumer demand during lockdowns have exacerbated fragility in the global semiconductor supply chain.
India's leading car makers Maruti Suzuki, Hyundai, Toyota and Honda witnessed a drop in vehicle dispatches to dealers last month as the global semiconductor shortage continued to impact their production, according to industry experts.
Carmakers are saddled with a backlog of over 7 lakh orders as of December 2021, due to the shortage of semiconductors, according to the Economic Survey.
With the delay in supply, the average lead time (the difference between the date of order and actually receiving in the automobile) for the industry for 2021 has been around 14 weeks globally.
Meanwhile, the US-China tariff war that began under the Trump administration and geopolitical conflicts between the two global rivals have made the environment even less conducive for cooperation, experts were quoted as saying by the VOA.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
