Trade Wars

Congress suspends flea law, consequences could be brutal

The US Congress owns the Chip Act. With funding of $ 52 billion, the bill could deflect the chip shortage crisis and strengthen American technology.

If Congress continues to drag its feet on the CHIPS for America Act, the consequences will be dire. Chips are everywhere, from cars and cell phones, to cloud computing, smart factories and defense systems. Chip shortages began during the pandemic when automakers slowed down and chipmakers shifted production to other booming industries like communications. When automakers came back to the table with more innovative car designs, they saw a serious shortage that quickly spread to all industries.

Semiconductors were invented in the United States For decades, the country has been the world leader in the industry. Today, supply chain disruptions, political tensions, the pandemic, and an all-time high demand for new technologies threaten chipmaking models and do not favor the United States.

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Related: Apple Has Faced Darkest Supply Issues In Years Thanks To Chip Shortage

Intel, Micron, and other major US microchip companies have raised red flags for Congress to block the CHIP Act. The $ 52 billion funding – awaiting House approval, was quickly passed to the Senate, but encountered Republican opposition in the House and got stuck. Nonetheless, President Joe Biden urges Congress to pass the law before Christmas in a desperate attempt to deflect the consequences of the 2022 chip shortage crisis. Some Republicans in the House say the CHIP law lacks the force. necessary to fight against China. But the law was not designed to create self-sufficient US chip production units or to cut dependence on the rest of the world. Instead, it was intended to bolster the US semiconductor industry and get through a severe crisis that is only getting worse.


Shortages, inflation, job losses and national security

Photo via SIA

In 1990, the United States manufactured 37% of all semiconductors in the world. However, the Semiconductor Industry Association, SIA, explains that it only produces 12% today. SIA says the fall was caused by a “lack of ambitious investments and lack of government incentives.“Thanks to government incentives and support, Asian governments now produce 75% of all semiconductors in the world. Micron said they anticipate a $ 150 billion deployment if the U.S. government commits to Incentives in place Intel added that they would invest $ 20 billion but need government incentives to fill in the gaps.

Semiconductors are one of the main US exports. One million six hundred thousand American jobs depend on the sector. Fleas have a symbiotic relationship with innovation. American companies dedicated to technologies such as AI, 5G, space technology and the automotive industry will be badly affected if the United States loses its leadership in semiconductors. Internationally, the United States will lose its influence in the global technology race. Nationally, minimizing the chip shortage crisis will only create product shortages, higher prices and inflation, job losses, and social, economic and political unrest. Chips have also played a vital role in public health, accelerating vaccine development, tracking and testing COVID, increasing telemedicine and medical equipment.


The Chip Act is designed to double the construction of factories for logic, memory and analog semiconductor installations over the next ten years. This will reduce reliance on unstable parts of Asia susceptible to disruption caused by natural disasters, trade wars, political tensions, supply chain crises or global health crises. As innovation does not stop and demand for chips increases, the Chip Act waits for Congress to see the light of day.

Next: Don’t Expect Chip Shortage To End In 2022, TSMC Warns

Source: Axios, SIA – Semiconductor Industry Association

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