√US Government commits $US52 billion to semiconductor industry

After years of industry turmoil, the US Government has signed a multi-billion dollar deal to encourage domestic semiconductor chip manufacturing, to avoid a reliance on Chinese-sourced components.

The United States is seeking to reduce its reliance on Chinese-made semiconductor computer chips – a vital component in new cars, as well as digital consumer products and defence technology.

Overnight, the US Government signed a $US52.7 billion ($AU75.7bn) executive order to boost research and provide subsidies to the chip-making industry, with the aim to help entice computer hardware companies back to the country’s shores.

The deal includes an attractive 25 per cent tax credit for companies investing in US semiconductor manufacturing.

The automotive industry continues to feel the effects of the global semiconductor chip shortage, which was thrown into turmoil during the early stages of the COVID-19 pandemic in 2020.

With new cars requiring approximately 300 semiconductors – and electric vehicles needing as many as 3000 – the multi-billion dollar deal is expected to attract more factories to the US, and help shore up supply to the US auto industry as it transitions away from petrol and diesel vehicles over the next decade.

Many carmakers have been forced to reduce the output of new cars in the past two years, or eliminate features from models in an effort to manage the supply of the computer chips.

This week, California put forward new rules which will effectively end the sale of new internal-combustion engine cars by 2035 – with 16 other US states expected to follow with similar legislation.

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