Senate Proposes $52 Billion Fund For U.S. Chip Production And Development

U.S. Senate Democrat leader Chuck Schumer has put forth an emergency funding proposal that would sideline $52 billion to support domestic chip production and development.

The funding proposal is included in a 1,400 page bill the Senate will table this week, according to Reuters, and suggests spending $120 billion in total on advancing the development and production of U.S. technology – including $52 billion for chip production, research and development.

“American manufacturing has suffered rather dramatically from a chip shortage,” Schumer said. “We simply cannot rely on foreign processors for chips. This amendment will make sure that we don’t have to.”

A shortage of semiconductor chips has crippled the U.S. auto industry this year, forcing General Motors, Ford and other automakers to curb vehicle output in an effort to safeguard their limited chip supply. GM has idled its Lansing Grand River plant in Michigan until late June due to a shortage of chips, while the automaker’s Fairfax Assembly plant in Kansas and CAMI Assembly plant in Ontario will remain offline until late July. Despite the setbacks, GM still predicts it will post annual earnings “at the higher end of the $10 billion to $11 billion EBIT adjusted range,” that it outlined at the beginning of the year.

The majority of microchips are currently manufactured abroad, mainly in Asian countries like Korea, Taiwan and Japan. The bill put forth this week noted that China is ramping up its chip production efforts in an attempt to control more of the global chip supply, making U.S. chip production critical for the future of the country.

“There is an urgent need for our economic and national security to provide funding to swiftly implement these critical programs,” the bill said. “The Chinese Communist Party is aggressively investing over $150 billion in semiconductor manufacturing so they can control this key technology.”

SOURCE: GM AUTHORITY