Apple, Google and others form coalition to lobby U.S. lawmakers for $50 billion funding to boost local semiconductor manufacturing

Apple, Google, Microsoft, Amazon, and others have formed a new coalition called Semiconductors in America Coalition, to urge U.S. lawmakers for $50 billion in funding which should help boost local semiconductor manufacturing. This comes at a time when the global industry is seeing massive shortages in semiconductor production and is impacting everything from handheld products, gaming consoles to the automobile industry.

Apple CHIPS coalition

Semiconductors in America Coalition consists of industry giants like Apple, Intel, AMD, Qualcomm and more

The coalition is asking the U.S. Congress to fund the CHIPS for America Act (Creating Helpful Incentives to Produce Semiconductors for America) which was passed earlier this year. Through the act, President Joe Biden pledged to boost local semiconductor manufacturing and help fix the shortfall in supply. The Semiconductors in America Coalition comprises of industry giants including Apple, Google, Microsoft, Intel, AMD, Qualcomm, Amazon, Cisco, Verizon, and AT&T.

The letter by the coalition that is being sent to U.S. lawmakers reads:

The Semiconductors in America Coalition (SIAC), a coalition of semiconductor companies and downstream users of semiconductors, writes in support of President Biden’s call for $50 billion for the semiconductor manufacturing incentives and research investments in the bipartisan CHIPS for America Act. We urge Congress work to include these appropriations in upcoming legislation.

The letter goes on to say that government should avoid dictating any steps to reallocate supply, referring to the lobbying by U.S. automobile manufacturers who want to get priority for semiconductor production and shipments. However, over the long term, the CHIPS Act should help in building additional capacity for domestic semiconductor production in the U.S. which should help avoiding shortfalls in the future.

The current shortage of semiconductors is impacting a broad range of industries throughout the economy. To address this problem in the short term, government should refrain from intervening as industry works to correct the current supply-demand imbalance causing the shortage. But for the longer term, robust funding of the CHIPS Act would help America build the additional capacity necessary to have more resilient supply chains to ensure critical technologies will be there when we need them. Manufacturing incentives funded by Congress should focus on filling key gaps in our domestic semiconductor ecosystem and cover the full range of semiconductor technologies and process nodes – from legacy to leading-edge – relied on by industry, the military, and critical infrastructure.

U.S. production of semiconductor manufacturing is just 12% now in terms of market share, with most of the manufacturing being outsourced to other countries by most of the companies in the coalition.

Apple CEO Tim Cook had mentioned in the company’s Q2 earnings call that iPad and Mac production will be impacted by the global chip shortage in Q3 2021.

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