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June 22, 2022

Automakers urge speedy US chip funding

Funding includes $2 billion to incentivise production of "mature node" semiconductors.

By Graeme Roberts

Major automakers and industry suppliers on Wednesday urged Congress to move quickly to pass US$52 billion in subsidies for US semiconductor production, according to a letter seen by Reuters.

“If the U.S. is to remain a leader in automotive innovation, we must make the strategic, forward-looking investments today necessary to enhance the capacity and resilience of our domestic and regional semiconductor supply chains,” the letter said.

The letter warned “currently, the auto industry is facing substantial production losses stemming from capacity challenges across the global semiconductor supply chain” and added “numerous automakers have been forced to halt production and cancel shifts in the United States, with serious consequences for their workers and the communities in which they operate.”

Reuters said the funding includes $2 billion to incentivise production of “mature node” semiconductors used by the auto industry and in medical devices, agricultural machinery and some national defence applications.

Senate legislation, passed in June 2021, included $52 billion for chips subsidies and authorised another $200 billion to boost US scientific and technological innovation to compete with China.

The House version, passed in February, is nearly 3,000 pages long and includes the $52 billion along with a number of trade proposals not in the Senate bill, Reuters noted.

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