Tech giants lobby US to fund chip production

A pile of discarded processors sorted on a bin in a recycling and recovery compound
(Image credit: Shutterstock)

Tech giants in America have teamed up to launch a new lobbying group that’ll push the federal government to subsidize chip manufacturing with taxpayer money.

This lineup of tech heavyweights includes Apple, Microsoft, Google, Amazon Web Services, Intel, AT&T, General Electric, Cisco Systems, Hewlett Packard, and Verizon. Their newly formed lobbying group, the Semiconductors in America Coalition, announced it’ll ask Congress to fund the Creating Helpful Incentives to Produce Semiconductors (CHIPS) for America Act.

President Joe Biden has already asked Congress for $50 billion to fund the bill. It would use federal money to build more chip manufacturing capacity in the US.

Chip factories can cost $15 billion to build. The CHIPS for America Act would create a 40% refundable income tax credit for semiconductor equipment and any qualified investment expenditures through 2024.

“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,” the new lobbying group said in a letter to Congressional leaders.

The ongoing global semiconductor shortage is causing significant slowdowns in the technology and automotive industries.

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Cisco CEO Chuck Robbins recently predicted it would take “another six months to get through the short term” of the shortage. Robbins added the crisis is unlikely to be fully resolved until 2022.

Meanwhile, Dell Technologies founder and CEO Michael Dell recently said he expects that the chip crisis “will probably continue for a few years.”

Ford and other automakers have asked the US government to help secure a steady supply of semiconductors to keep their auto factories running. However, this new tech lobbying group argued the government shouldn’t favor a single industry, such as carmakers.

The Biden administration has already said it’s exploring options to address the global chip shortage.

A different group representing the semiconductor industry recently wrote to the president, asking him to fund semiconductor manufacturing and research in the administration’s economic recovery and infrastructure plan.

The Semiconductor Industry Association (SIA) warned that America’s share of global semiconductor manufacturing capacity has decreased from 37% to 12% since 1990. This is primarily due to government subsidies in other regions and stagnation in federal investment.