Manufacturing CEOs Want to Bring More Chip Production to US

Bringing more semiconductor production to the U.S. could help counter the global chip shortage, according to a majority of American heavy-equipment manufacturers in a survey.

Almost 90% of whole-good, component and portable-good manufacturers said ramping up the domestic output of components and chips could relieve supply-chain pressures, a survey by the Association of Equipment Manufacturers released Monday showed.

Also, 91% of surveyed chief executive officers said the federal government should invest more in training, as four in five companies have delayed production because of skilled-labor shortages since companies began dealing with chip shortages last year, it found.

About 79% of the executives surveyed said they had to raise prices on finished products and 60% saw delays in production because of the shortages.

As companies worldwide report second-quarter results, complaints about chip shortages related to the pandemic continue to emerge in analyst calls. Carmakers worldwide, from Sweden’s Volvo Car AB to South Korea’s Kia Motors, are still seeing disruptions caused by the lack of enough chips.

Meanwhile, chipmakers are doubling down to expand their production capacity in the U.S. Samsung Electronics Co. is considering spending almost $200 billion on 11 semiconductor manufacturing facilities in Texas, and GlobalWafers Co. plans to build a $5 billion silicon-wafer facility in the state that will be the biggest of its kind on American soil.

Last week, the U.S. Senate voted by a wide margin to begin a debate on legislation to provide more than $52 billion in grants and incentives for the American semiconductor industry. A draft bill in consideration includes a 25% investment-tax credit for the manufacturing of chips and the tools to create them, $200 million for worker training and $1.5 billion for public wireless supply-chain innovation.

The survey was conducted between June 27 and July 6, and included responses from 100 U.S.-based CEOs.

Augusta Saraiva reports for Bloomberg News.

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