President Biden’s effort to get congressional support for his $2.2 trillion infrastructure package includes a strong push for bolstering domestic chip manufacturing with a $50 billion investment.
However, some question whether his plan will get bipartisan support and whether the financial boost could relieve the current chip shortage any time soon. By several recent accounts, it appears the industry is settling in for chip shortages to last into 2023, especially for chips used by automakers, even as companies commit to expand chipmaking capacity.
The president has appeared several times in public forums on the issue, holding up props like a tiny semiconductor and a larger wafer in a Monday virtual summit with chipmakers and car company executives who have had to scale back vehicle production at plants for want of more chips.
He claimed bipartisan support for the CHIPS for America initiative which passed last year as part of the Defense Act and calls for tax incentives for building domestic chip fabrication facilities. A letter he received said 23 U.S. Senators and 42 House members from both parties supported the CHIPS Act and how it helps the U.S. compete with China in chip research and development.
“China and the rest of the world are not waiting,” Biden said.
The meeting resonated with executives who attended the event, according to some accounts.
Several executives interviewed by VLSI Analyst Dan Hutcheson after the meeting “are uniformly bullish about bi-partisan support for the industry,” Hutcheson told Fierce Electronics on Thursday.
The bullish executives came from firms including TSMC, based in Taiwan, a leading producer of chips designed by American companies, including Apple, Hutcheson said. TSMC alone produces more than half the world’s chips. The company recently said it will spend $100 billion over the next three years to increase capacity to meet demand.
Others who attended were leaders from GlobalFoundries, Micron Technology, NXP, Samsung and Intel.
In early April, GlobalFoundries CEO Tom Caulfield told CNBC that the world’s semiconductor supply could lag behind demand until 2022 or later. GlobalFoundries is the third-largest foundry and plans to invest $1.4 billion in chip factories this year.
In another example, Nvidia uses a variety of foundries to produce the chips it designs. On Tuesday, Nvidia CEO Jensen Huang told reporters he doubted the chip shortage “will be a real issue in two years…The industry recognizes this and will build out the necessary capacity.”
Huang added he has “every confidence” that a high-performance AI chip called Atlan that Nvidia is developing for autonomous vehicles will be available for cars coming in 2025. “We’ll do whatever is necessary to do when the time comes,” he said. “A company of our scale and resources can surely adapt the supply and make [Atlan] available to customers that use it.”
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