June 18, 2024


Where Innovation Lives

Automakers ask US government for help with the semiconductor shortage

2 min read

New cars require a lot of processing power, and that’s been a problem during the global semiconductor shortage.

Kyle Hyatt/Roadshow

In case you hadn’t heard, there’s a global silicon chip shortage. In addition to causing problems for people trying to build gaming computers, it’s giving serious trouble to automakers worldwide. It’s gotten bad enough that, according to a report published Tuesday by Automotive News, a coalition of automakers have asked the US government for help.

The group — called the Alliance for Auto Innovation — suggests that the government mandate that silicon suppliers set aside a dedicated amount of automotive-grade silicon to reduce the likelihood that continued silicon shortages would impact automotive production. Presently, the group estimates that US automakers could produce over a million fewer cars this year due to the current shortage.

President Joe Biden has already taken steps to address the silicon problem. This includes asking Congress to authorize $37 billion to help increase silicon production inside the US. His order also launched a 100-day supply chain study for four major industries: semiconductors, EV batteries, pharmaceuticals and rare-earth minerals.

According to Automotive News, the automotive industry has been particularly hard-hit by this chip shortage because of actions taken early on in the pandemic — namely, the idling of factories. The halts in production instituted by vehicle manufacturers also forced them to cancel orders of components and raw materials, including semiconductors. The companies that make those chips then pivoted to selling them to other industries as a result.

As cars continue to become more technologically advanced and therefore more heavily dependent on computers, this kind of supply chain disruption will continue to be a factor that automakers will have to find contingencies for, particularly if the Biden administration’s legislation ends up being less far-reaching than intended.

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