Far beyond the simple supply problems of consoles and graphics cards, the shortage of electronic components handicaps all industries and this worries the US government. Newly elected US President Joe Biden is reportedly about to sign an executive order to set up a team that would have 100 days to identify blocking points. And put in place a revival plan for this industry, once an American flagship.
While the main players are still American, from chips (AMD, Intel, Qualcomm, etc.) to equipment manufacturers and production specialists (Applied Materials, Cadence Systems, etc.), the production of chips made in the USA is at half mast, since ‘it fell from 37% of global volume in the 1990s, to just 12% in 2020.
These rumors of plans to revitalize the industrial sector (production) of chips in the USA come at the same time as the Semiconductor Industry Association sent a letter signed by 21 CEOs of companies – including Intel, AMD, or Qualcomm – asking the government to ” substantial funding and incentives for semiconductor manufacturing, in the form of subsidies and / or tax credits “.
While the establishment of a semiconductor factory is automatically the subject of subsidies in South Korea or Taiwan, the high level of competition in the field in the USA means that these aids are made on a case-by-case basis, after long analyzes of files. The giants of chip development and production want the government to go faster, considering that ” boldness is necessary here to meet the challenges we face. The costs of inaction are even greater “.
While the latest generation factories now cost over $ 10 billion, companies able to finance them are scarce. And the variety of business models – Intel designs and produces and subcontracts very little, AMD and Qualcomm design and produce, Global Foundries only produces – makes it difficult for these players to act together considering the level of competition.
While most of the production takes place in factories in friendly countries – Taiwan and South Korea – external dependence on a now globalized chip production line is now putting industries such as the automobile in difficulty. Like the Germans, US automakers put their semiconductor orders on hold last year following a drop in demand for vehicles due to the pandemic.
But they had forgotten – or did not see – that the increasing demand in many sectors (IT, video games, etc.) and the supply problems (substrates, memory modules, etc.) would mean that their place was going to be be taken by other sectors. With production times of several weeks or even months, this competition for production lines, especially high-tech (EUV engraving) means that certain industries – notably auto – are almost at a standstill, depending on how supplies have been managed. in 2020.
Having a domestic production tool partly financed by federal aid would allow American industries to have more guarantees in the event of a crisis, as is currently the case. It remains to be seen whether the US semiconductor industry and its government will find common ground financially.
Sources : Bloomberg, Reuters