Joe Biden seeks to respond to one of the economic emergencies of the moment by associating this Friday with the announcement of the giant Intel of a massive investment of 20,000 million dollars to produce in the United States electronic chips, whose scarcity feeds a growing inflation.
The US president insists that galloping inflation in the United States is directly related to problems in global supply chains and urges manufacturers to bring back domestic production, particularly of semiconductors.
These computer chips are essential to a host of industries and products, from cars and smartphones to medical equipment and even vacuum cleaners.
Intel reported this Friday that construction will begin on two semiconductor factories near the Ohio state capital, Columbus, by the end of the year, with the goal of starting chip production as early as 2025.
“Today’s announcement is the latest indicator of progress in the efforts of the Biden–Harris administration to accelerate domestic manufacturing of critical goods like semiconductors, to address short-term supply chain bottlenecks, to revitalize our manufacturing base, and to create good jobs here at home,” the White House said in a statement.
Intel plans to hire 3,000 new employees for these sites, whose construction will involve 7,000 workers.
The explosion in demand during the pandemic has created bottleneck that force companies to reduce production around the world and encourage inflation.
“Once, the United States led global semiconductor manufacturing. But in recent decades, it has lost its edge: Our share of global semiconductor production has fallen from 37% to just 12% in the last 30 years,” lamented the White House.
The Biden economic advisers They note that last year a third of annual price increases were due “to high car prices alone,” the sector where chip shortages have been most severe.
Biden will press Congress this Friday to pass legislation to strengthen research and development, as well as manufacturing in the United States for critical supply chains, especially semiconductors.
Last June the Senate approved a law on innovation and competition.
“The administration is working with the House and Senate to finalize this legislation,” the White House said.
The text includes funds for the “CHIPS for America Act”, which will provide 52,000 million dollars “to catalyze more investment from the private sector and maintain American technological leadership,” the presidency explained.
little short-term effect
In a context in which the pandemic brought to light Western industrial dependence on Asia, the governments of the United States and Europe have been concerned with ensuring their supply of semiconductors, the manufacture of which has shifted years ago to Asian countries, which have lower costs.
Slab chips are largely manufactured in Taiwan.
Biden meets this Friday at the White House with the head of Intel, Pat Gelsinger to discuss the project.
Since the beginning of 2021, the semiconductor industry has announced nearly $80 billion in new investment in the United States through 2025, according to industry federation data cited by the White House.
“These investments will create tens of thousands of good-paying jobs in the United States, support American technology leadership, and promote the security and resiliency of global semiconductor supply chains,” the White House said.
According to US Secretary of Commerce Gina Raimondo, “American consumers can expect lower prices as we bring home production of the semiconductors that power our economy.”
However, given the delays in starting production, they will have little effect on inflation in the short term.