Manufacturing CEOs want to bring more chip production to the US to counter global shortage


(Bloomberg) – Sign up for the New Economy Daily newsletter, follow us @economics and subscribe to our podcast.

Bringing more semiconductor production to the United States could help counter the global chip shortage, according to a majority of U.S. heavy-equipment makers in a survey.

Nearly 90% of whole-goods, component and wearable product makers said increasing domestic production of components and chips could ease supply chain pressures, according to a survey by the Association of Equipment Manufacturers released Monday.

Additionally, 91% of CEOs surveyed said the federal government should invest more in training as four out of five companies have delayed production due to skilled labor shortages since companies began facing to chip shortages last year, he found.

About 79% of executives surveyed said they had to raise prices for finished goods, and 60% saw production delays due to shortages.

As companies around the world report their second-quarter results, complaints about pandemic-related chip shortages continue to emerge in analyst calls. Automakers around the world – from Volvo Car AB in Sweden to Kia Motors in South Korea – are still experiencing disruption caused by the lack of chips.

Meanwhile, chipmakers are doubling down to increase their production capacity in the United States. Samsung Electronics Co. plans to spend nearly $200 billion on 11 semiconductor fabs in Texas, and GlobalWafers Co. plans to build a $5 billion silicon wafer factory in the state that will be the largest of its kind on American soil.

Last week, the US Senate voted overwhelmingly to begin debate on legislation providing more than $52 billion in subsidies and incentives for the US semiconductor industry. A bill under consideration includes a 25% investment tax credit for manufacturing chips and the tools needed to create them, $200 million for worker training and $1.5 billion for public wireless supply chain innovation.

The survey was conducted between June 27 and July 6 and included responses from 100 US-based CEOs.

©2022 Bloomberg LP


About Author

Comments are closed.