Tech giants be part of name for funding U.S. chip manufacturing By Reuters

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© Reuters. FILE PHOTO: Silhouette of a mobile user next to a screen projection of the Apple logo in this image illustration from March 28, 2018. REUTERS / Dado Ruvic / Illustration

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By Stephen Nellis

(Reuters) – Some of the world’s largest chip buyers, including Apple Inc (NASDAQ :), Microsoft Corp. (NASDAQ 🙂 and Google from Alphabet (NASDAQ 🙂 Inc are joining top chip manufacturers such as Intel Corp. (NASDAQ 🙂 to create a new lobby group pushing for government subsidies for chip manufacturing.

The newly formed Semiconductors in America Coalition, which also includes Amazon.com’s Amazon Web Services (NASDAQ :), asked US lawmakers on Tuesday to provide funding for the CHIPS for America Act, and President Joe Biden asked Congress asked to provide $ 50 billion.

“Solid funding for the CHIPS Act would help America build the additional capacity it needs to have more resilient supply chains to ensure critical technology is available when we need it,” the group said in a letter to the Democratic and Republican leaders in both houses of the US Congress.

A global chip shortage has hit automakers hard. Ford Motor (NYSE 🙂 Co said it could cut production in half in the second quarter.

Automotive industry groups have urged the Biden administration to secure chip supplies for car factories. However, Reuters reported last week that administration officials were unwilling to use a national security law to distribute computer chips to automakers as it could harm other industries.

The new coalition includes some of these other chip-consuming industries with members like AT&T (NYSE :), Cisco Systems (NASDAQ :), General Electric (NYSE :), Hewlett Packard Enterprise (NYSE 🙂 and Verizon Communications Inc (NYSE :). It warned against government measures to favor a single industry such as automakers.

“The government shouldn’t intervene as the industry works to correct the current supply-demand imbalance that is causing the shortage,” the group said.

Tech companies like Apple are also affected by the chip shortage, but far less so than automakers.

The iPhone maker announced last month that it would lose $ 3 billion to $ 4 billion in revenue in the current quarter ending June due to chip shortages. However, this corresponds to only a few percent of the 72.9 billion US dollars that analysts expect for the third fiscal quarter of Apple according to estimates of the refinitive revenues.

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