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Biden says the United States should invest in computer chips

Washington (AP) – President Biden used a virtual meeting with corporate executives around the global semiconductor shortage to demand his $ 2.3 trillion infrastructure program on Monday, telling them that the United States should be the world leader in computer chips.

“We need to build today’s infrastructure, not renovate yesterday’s one,” he told a group of 19 tech-savvy automakers. “China, the rest of the world is waiting, there is no reason why Americans should wait.”

He said that the country has not made large investments in order to be ahead of global competitors, it should strengthen its game.

Biden addressed a meeting of administration officials and corporate executives to discuss a stronger supply chain for US computer chips. The meeting took place at a time when the global chip shortage continued to plague a wide range of industries.

The participation of CEOs of AT&T, Dell, Ford, General Motors, Stellantis (formerly Fiat Chrysler), Intel, Northrop Grumman and others was planned.

But industry experts say little can be done to address the scarcity that delayed the new iPhone, forcing automakers to temporarily shut down factories as they lack the many computers needed for engines, gearboxes, brakes and more. to enable the properties.

Instead, Biden began developing the US chip supply chain, with most manufactured in Asia shipped to the United States. In February, he ordered a review of the supply chain and promised to work with international partners to ensure sustainable supplies.

Wedbush analyst Daniel Ives said there was little that could be done immediately to address the issue. “It may change the situation in the next three or five years, but there are currently no structural changes that can mitigate the shortage,” he said.

The shortage has already made it difficult for schools to buy enough notebooks for students who have to study at home, delayed the release of popular products, and created crazy clutter to find the latest video game consoles.

But things have gotten worse in recent weeks, especially in the auto industry, where factories are shutting down because there are no chips to finish building laptops.

The coronavirus epidemic affected a cascade of events that led to problems. The chip factories were forced to close at the beginning of last year, particularly abroad, where most of the processors are produced. When they reopened, they had repercussions that worsened due to unforeseen demand. For example, the demand for personal computers increased as government blockades forced millions of office workers, students, to work remotely or attend classes.

High demand for consumer electronics has pushed the auto industry. Chipmakers have stepped up the pressure by redeploying factory lines to better serve the consumer electronics market, which brings them much more revenue than cars.

After an eight-week outbreak in the spring, carmakers began reopening their plants earlier than expected. But they learned that chipmakers were not able to quickly turn the switch and make more powerful processors needed for cars. Industry leaders say the deficit should start to end in the third quarter of this year.

“It’s just a symptom of a bigger problem that the United States relies too much on Asia for such powerful parts as semiconductors,” said Ives, who said the meeting was too late. “I think that now it just reveals structural problems, as well as some possible US national security issues, given its reliance on Asia,” he said.

According to the World Semiconductor Industry Association, the United States has only 12% of the world’s semiconductor plant capacity, up from 37% in 1990.

Not surprisingly, key players in the chip industry welcomed the opportunity for even more support from the Biden administration to help subsidize the processing and distribution of processors, which could play an integral role in the economy for decades to come.

“We appreciate the White House meeting with industry leaders on the ability to ensure a strong, resilient semiconductor supply chain,” said the semiconductor association, a business group of three executives who participated in Monday’s discussion.

Other members of the association include three major chip players outside the United States, Samsung, Taiwan Semiconductor Manufacturing Co. և NXP, who sent CEOs to the meeting.

The deficit comes at a time when the auto industry is accelerating plans to move away from internal combustion vehicles by moving more to battery-powered vehicles.

As part of his $ 2.3 trillion infrastructure project, Biden wants to spend $ 174 billion on electric vehicles over eight years. That figure includes incentives for consumers, grants to build a $ 500,000 refueling station, և money to make batteries, զարգ to develop US supply chains for minerals. Biden also wants Congress to spend $ 50 billion on semiconductor manufacturing and research.

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Krisher reported from Detroit. Michael Lidtke contributed from San Ramon, California.

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