US senators urge White House action on auto chip shortage

03 February 2021 - 08:30 By Reuters
A group of 15 US senators urged the White House to work with congress to address the global semiconductor shortage that is hampering car manufacturing.
A group of 15 US senators urged the White House to work with congress to address the global semiconductor shortage that is hampering car manufacturing.
Image: 4itolino / 123RF

A group of 15 US senators, including majority leader Chuck Schumer and Republican John Cornyn, on Tuesday urged the White House to work with congress to address the global semiconductor shortage that is hampering car manufacturing.

In a letter to the White House, the senators from key auto states like Michigan, Ohio, Tennessee, Wisconsin, Illinois, Indiana and South Carolina, warned the "shortage threatens our post-pandemic economic recovery".

Car makers around the world are shutting assembly lines because of problems in the delivery of semiconductors which have been exacerbated in some cases by former president Donald Trump administration's actions against Chinese chip factories.

The shortage has impacted Volkswagen, Ford Motor Co, Subaru Corp, Toyota Motor Corp, Nissan Motor Co Ltd, Fiat Chrysler Automobiles and other car makers.

"We believe the incoming administration can continue to play a helpful role in alleviating the worst impacts of the shortage on American workers," the senators wrote.

On Tuesday a US spokesperson for Nissan said the car maker made some short-term production adjustments because of the shortage "starting with three non-production days on the truck line at our Canton, Mississippi, facility".

The senators, including auto caucus chairs Democrat Sherrod Brown and Republican Rob Portman, urged the White House "to support efforts to secure the necessary funding to swiftly implement the semiconductor-related provisions in the most recent national defense authorisation act, which would boost the production of semiconductor manufacturing and incent the domestic production of semiconductors in the future".

Matt Blunt, who heads the American Automotive Policy Council representing US car makers, praised the senators "who recognise it is a significant challenge for the auto sector".

The White House did not immediately comment.

Taiwan, home to the world's largest contract chip maker Taiwan Semiconductor Manufacturing Co Ltd (TSMC)  and other major tech firms, is at the center of efforts to resolve the shortage.

Taiwanese companies have pledged to ramp up production and the government has urged them to address the problem.

Taiwan economy minister Wang Mei-hua will hold a virtual meeting with the US at the end of this week to discuss supply chains, with semiconductor firms present, her office said last Friday.

Car makers around the world are adjusting assembly lines caused by the shortages and have cut some production  caused by manufacturing delays that some semiconductor makers blame on a faster-than expected recovery from the coronavirus pandemic.

In 2019, automotive groups accounted for roughly a tenth of the $429bn (roughly R6,409,774,800,000) semiconductor market, according to McKinsey.


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