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Chip firm chiefs beg Biden to back them with government cash

US chip company chiefs have urged President Joe Biden to back them with funding to help them compete with their Asian rivals.

The chief executives of Intel Corp, Qualcomm Inc, Micron Technology Inc and Advanced Micro Devices Inc all put their names to a joint letter on Thursday asking for “substantial funding for incentives for semiconductor manufacturing” as part of his economic recovery and infrastructure plans. 

The letter, sent by the Semiconductor Industry Association, said that the U.S. share of semiconductor manufacturing dropped from 37% in 1990 to 12% today. 

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It comes as a global chip shortage has seen factory lines at Ford Motor Co and General Motors Co shut down, with executives at the automakers predicting billions in lost profit. 

The tight chip supplies have even made it tough for consumers to buy popular gaming consoles such as Microsoft Corp’s Xbox and Sony Corp’s Playstation.  

The missing chips are mostly manufactured in countries like Taiwan and Korea, which have come to dominate the industry. 

GOVERNMENT INCENTIVES

“This is largely because the governments of our global competitors offer significant incentives and subsidies to attract new semiconductor manufacturing facilities, while the US does not,” the group said.

Congress last year authorised subsidies for chip manufacturing and semiconductor research, but lawmakers must still decide how much funding to provide. The US chip group urged Biden to provide such funding in the form of grants or tax credits.

“Working with Congress, your administration now has an historic opportunity to fund these initiatives to make them a reality,” the chip group wrote. “We believe bold action is needed to address the challenges we face. The costs of inaction are high.”

  • Reuters

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Sean OMeara

Sean O'Meara is an Editor at Asia Financial. He has been a newspaper man for more than 30 years, working at local, regional and national titles in the UK as a writer, sub-editor, page designer and print editor. A football, cricket and rugby fan, he has a particular interest in sports finance.

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