New estimates from AutoForecast Solutions show that the semiconductor chip shortage that has plagued auto manufacturers for the past two years may be easing. However, the AFS still expects to end the year with factories worldwide cutting 4.26 million vehicles from production plans because of inadequate microchip supplies. Year-to-date, North America has cut 1.37 million vehicles from production plans because of the shortage.
Last year, more than 10.5 million vehicles were cut from production plans. However, other issues facing manufacturers, like shipping delays and international supply interruptions, are also factors.
The Biden Administration has been working to find ways to spend more than $52 billion in federal subsidies provided by the CHIPS and Science act, which was passed into law in August to increase domestic semiconductor chip production.
The White House has said that the US currently produces only 10% to 12% of the world’s supply of semiconductor chips, and East Asia accounts for 75% of the global production of advanced chips.
President Biden toured an IBM manufacturing plant in Poughkeepsie, New York earlier this month to recognize a $20 billion investment in semiconductor research and development. Tech company Micron also announced that it plans to spend $100 billion building a new computer chip manufacturing facility in upstate New York.
“We need a whole-of-government approach, and we need to get everyone on the same page to figure out how we’re going to deploy that $52.5 billion,” said Ronnie Chatterji, who is in charge of coordinating the implementation of the CHIPS act.
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