U.S. Commerce Secretary Calls For Surge in Chip Production in the Country

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The United States Secretary of Commerce Gina Raimondo called for a major increase in the country’s production capacity for computer chips. The current shortage of these chips is causing a global supply chain crisis. Raimondo said the push for making more chips could create jobs and wean the nation off over-dependence on China and Taiwan.

“Right now we make 0% of leading-edge chips in the United States. That’s a problem,” Raimondo said Tuesday in a virtual conference of the Council of the Americas, a business group, according to Bloomberg. “We ought to be making 30% because that matches our demand. So, we will promise to work hard every day, and in the short term also see if we can have more chips available so the automakers can reopen their factories.”

Gina Raimondo
Gina Raimondo 
Photographer: Oliver Contreras/The Washington Post/Bloomberg

It would likely take decades of sustained investment to reach the 30% mark. In the shorter term, the Biden administration is in talks with Taiwan and Taiwan Semiconductor Manufacturing Co. (TSMC), the largest manufacturer of semiconductors, to prioritize the needs of American automakers, Raimondo said. The American automakers are in dire need of the chips as the shortage has led to closed factories and furloughed workers.

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Automakers had to cut down production after a surge in orders for consumer electronics items such as smartphones, TVs and computers left less capacity for a stronger-than-expected rebound in vehicle demand.

Raimondo endorsed Biden’s proposal for a $50 billion fund to build semiconductors. Carmakers are rallying for a portion of the money to be reserved for vehicle-grade chips. They have warned of a potential 1.3 million-unit shortfall in the car and light-duty truck production in the U.S. this year if their industry isn’t given priority.

“In the process of building another half a dozen fabs in America, that’s thousands of Americans that get put to work,” Raimondo said. A “fab” is shorthand for a semiconductor fabrication facility.

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