Congress, companies hoping to solve computer chip shortage

Morning In America

(NewsNation Now) — Semiconductor chips: They’re in all kinds of technology we use every single day, from computers to smartphones to cars.

But now, there is an “alarming” shortage of them, affecting people’s ability to buy automobiles and other electronics — and potentially shutting down factories, the Commerce Department said Tuesday.

Some entities are looking at ways to avoid these consequences, however, with both Congress and tech companies making moves to alleviate the shortage.

Right now, inventory for some companies is at a five-day supply of chips, when it would usually be 40 days.

Overall, the United States’ share of the worldwide chip market has declined from 37% to 12%. Right now, 80% of all computer chips are made in Asia.

Semiconductors for cars and medical devices are the scarcest. Much of the automobile industry has been affected, causing auto production to be disrupted and prices to jump. Over the past 30 years, prices have climbed by 10%.

“It’s clear the only solution to solve this crisis in the long term is to rebuild our domestic manufacturing capabilities,” U.S. Commerce Secretary Gina Raimondo said.

Amid all this, Intel has said it will invest $20 billion into two new computer chip factories in Ohio. These planned factories will support both its own line of processors and its new “foundry” business, the Associated Press reported. Chips built at this factory won’t just reduce supply chain pressures, Intel CEO Patrick Gelsinger said at a White House event. He said they will also bolster the United State’s national security and bring more tech jobs to the region.

Construction on the factories, which are expected to create tens of thousands of jobs, is set to begin this year. Intel said it could start producing its own chips by 2025.

Both the House of Representatives and Senate have come up with their own bills to stem the shortage.

The Senate passed its in June. Called the U.S. Innovation and Competition Act, it would allocate $52 billion to increase the United States’ semiconductor production, and $190 billion to strengthen the country’s technology and research.

The House’s America Competes Act also includes $52 billion in subsidies for chip manufacturing and research. However, there are some differences between the two pieces of legislation, as The Hill’s Niall Stanage told NewsNation’s Adrienne Bankert on “Morning in America” on Wednesday.

The House bill puts more emphasis on supply chain monitoring, Stanage said, to avoid disruptions that have been seen before. It also has a measure to make sure U.S. taxpayer money doesn’t go to fund facilities overseas.

Republicans are protesting one part of the America Competes Act, however: a provision providing money toward addressing climate change. The GOP said this part of the bill isn’t relevant to the issue at hand, Stanage said.

President Joe Biden has called on Congress to act on the computer chip shortage.

“The proposals laid out by the House and Senate represent the sort of transformational investments in our industrial base and research and development that helped power the United States to lead the global economy in the 20th century and expand opportunity for middle-class families,” Biden said in a statement Monday. “They’ll help bring manufacturing jobs back to the United States, and they’re squarely focused on easing the sort of supply chain bottlenecks like semiconductors that have led to higher prices for the middle class.”

© 1998 - 2022 Nexstar Media Inc. | All Rights Reserved.

Trending on NewsNation