The United States Commerce Secretary Gina Raimondo has urged lawmakers to act on auto chip funding before Congress departs for their August recess. Previously, the United States Senate approved the chip funding by a 62-38 vote. This approval authorized $190 billion towards helping the country with semiconductor production and research. This will also help the country compete with Chinese technology.
While the Senate has approved this latest act, called the U.S. Innovation and Competition Act, it still needs to be approved by the House. Commerce Secretary Raimondo has urged the House to finish this funding before they retire for their August recess. All signs from lawmakers in the House hint that they will indeed do this.
This latest push for chip funding comes amid a worldwide shortage. Many countries and industries have faced a raw material shortage in the past few months, mainly because the COVID-19 pandemic has caused a lot of supply chain and business problems. Auto manufacturers have, therefore, produced fewer cars because of this semiconductor shortage.
After realizing that this shortage could possibly have been avoided if there were factories in the United States that produced them, many have been pushing for government funding to allow this to happen quickly. If the House approves this funding, it could potentially generate more than $150 billion in production and research, as well as create around seven to 10 chip factories.
Obviously, it will take some time to build these chip factories. But with the government funding, many are hopeful that this job will be done quickly.
The House has not yet approved this funding, and it’s thought that the House lawmakers will not merely approve the Senate bill that was passed. Though there aren’t major differences between what the House and Senate want, the House will more than likely put their own influence on the act.
The Commerce Secretary stated that they will not use the Defense Production Act to help speed up chip production in the United States, though the administration hasn’t said that they have completely ruled it out. Instead, they are going to focus on allowing Congress to act on this.
The nation has been dealing with a huge chip shortage which has affected the overall production of auto cars this year. This shortage has also affected the overall price of cars in America, which has gone up in the last few months as manufacturers have attempted to deal with this shortage.
Auto sales have gone down in the past few months. During the COVID-19 pandemic, however, car sales did quite well, as many bought cars last year. As sales have slowed down these past few months, some economists hope that this will allow manufacturers to resupply their chip and material shortages.
This latest chip funding is mainly targeted to help keep American companies from experiencing this massive raw material shortage again. However, this funding along with the slower auto sales may help correct the current shortage the United States is experiencing right now, as well as in the future.
