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Plan to fix chip shortage stalls in Congress

US China Trade
Posted at 3:00 AM, Dec 06, 2021
and last updated 2021-12-06 05:01:02-05

WASHINGTON  — President Biden has said the shelves will not be empty this Christmas, however, his administration is admitting they have work to do when it comes to another shortfall in the country: computer chips.

IMPACT OF SEMICONDUCTOR SHORTAGE

They are tiny but the chips can impact an economy.

The Semiconductor Industry Association describes them as “the brains of modern electronics," allowing the technology in everything from a car to a child's toys to work.

The Secretary of Commerce said last week electric cars use around 2,000 different chips.

That’s double the number used in a non-electric car.

It’s one reason why there are vehicle buying delays nationwide.

"We are talking about the most critical issue facing Michigan right now," said Rep. Haley Stevens (D-MI) during an event last week.

It is estimated that the auto industry lost over $200 million this year because of the shortage.

HELP STALLED IN CONGRESS

Congress has attempted to address the issue this year, but action has stalled.

The CHIPS ACT passed the Senate with Democratic and Republican votes in June.

However, it has since stalled in the House with some members wanting to write their own version of the bill instead.

The Senate bill creates a new National Semiconductor Technology Center and invests over $50 billion to create more chips in the U.S.

Currently, the U.S. only makes around 12% of the global chip supply.

PATH FORWARD

It is possible, the CHIPS Act gets passed this year, but so far it has not been much of a priority of leadership.

Speaker Pelosi said last week the House and Senate were set to go to a conference to work out differences in the legislation, which was included in a much bigger China competitiveness bill the Senate passed.

It's also possible a version of the CHIPS Act is included in the National Defense Authorization Act which still needs a vote in Congress.

Passing the legislation wouldn’t solve the chip problem overnight. It would still take years for many chip-making factories to be built and come online.