SIA asks Biden to fund US semiconductors as shortage impacts auto plants

Pittsburgh — A group representing US chip companies sent a letter to US President Joe Biden Feb. 11 urging his administration to include substantial funding for semiconductor manufacturing and research in its economic recovery and infrastructure plan amid a global shortage that has disrupted automotive production.

"The share of global semiconductor manufacturing capacity in the US has decreased from 37% in 1990 to 12% today," the Semiconductor Industry Association (SIA) said in its letter. "This decline is largely due to substantial subsidies offered by the governments of our global competitors, which have placed the US at a competitive disadvantage."

Additionally, the group said that while US federal investment in semiconductor research has been flat in recent years, other governments have "invested substantially" in research initiatives to strengthen their own semiconductor capabilities.

SIA represents 98% of the US semiconductor industry by revenue, it said. The letter was signed by representatives from AMD, NVIDIA, IBM, Intel and Western Digital, among other companies in the industry.

Biden was said to be working to address the global semiconductor shortage, Bloomberg reported Feb. 11, citing a White House official.

"Biden is expected to sign an executive order directing a government-wide supply chain review for critical goods in the coming weeks," Bloomberg reported. "The chip shortage is a central reason for the order."

No official statement had been issued by the White House as of Feb. 11 and a representative was not immediately available for comment.

Semiconductors have become an increasingly critical component for automotive manufacturers as they add more electronic features to vehicles.

The semiconductor shortage has impacted vehicle production in recent weeks for multiple global automobile manufacturers, including North America's Big Three automakers.

General Motors said it has shut down operations until mid-March at its Fairfax plant in Kansas, CAMI plant in Ontario and San Luis Potosi plant in Mexico.

"Our intent is to make up as much production lost at these plants as possible," a GM spokesman said in a statement sent to S&P Global Platts Feb. 11. "In addition, when there is a shortage of semiconductors that impacts production, in some cases we intend to build vehicles without certain modules and will complete them as soon as possible."

GM said it is currently prioritizing its supply for the production of more popular and in-demand vehicles such as trucks and SUVs.

Stellantis, the entity resulting from the recent merger of Fiat Chrysler and Groupe PSA, suspended operations at its assembly plant in Belvidere, Illinois, for the week of Feb. 8 without a definitive restart date, according to local reports.

A representative for Stellantis or Fiat Chrysler was not immediately available for comment Feb. 11.

Ford also reduced operations at two of its US truck manufacturing facilities during the week of Feb. 8, with plans to resume full production Feb. 15, as previously reported by Platts.