Biden administration: Chip turning point approaching

The Biden administration is optimistic about the chip issue. They say the global chip supply shortage is showing signs of easing and that chip makers have pledged to make more chips for car companies.
Recently, U.S. Commerce Secretary Gina Raimondo took the lead on chip supply on behalf of the Biden administration. She held a series of matchmaking sessions with semiconductor makers and their suppliers, as well as customers, including carmakers.
Senior administration officials generally see these efforts as helping to ease mistrust between chip suppliers and suppliers over chip configurations and orders from auto companies.
"A series of efforts are starting to pay off," Raimundo said in an interview. "Chipmakers are becoming more transparent about their production and shipments, and there is a gradual increase in supply to automakers." In addition, the US government has recently pressed the governments of Malaysia and Vietnam to secure production at their chip plants.
In recent weeks, Jim Farley, the chief executive of Ford, and Mary Barra, the chief executive of GENERAL Motors, both told Raimundo that they were getting more chips and that things were getting better.
Goldman Sachs said in an analysis last month that the impact of chip shortages peaked in the second quarter and would ease in July.
A GM spokesman confirmed Bora's conversation with Raimundo and provided a statement the company issued on July 15. Gm's global sourcing, supply chain, engineering and manufacturing teams will continue to look for creative solutions and work with the supply base to maximize production of vehicles with high demand and limited capacity, including full-size trucks and SUVs, the statement said.
Global semiconductor manufacturing is concentrated in two Asian companies, Taiwan Semiconductor Manufacturing (TSMC) and Samsung Electronics. Among them, TSMC is the main partner of many of the world's largest carmakers. The company said last week it would increase production of microcontrollers by almost 60 per cent this year, a move it expects to significantly increase its supply to automotive customers starting this quarter.
Until now, semiconductor makers and automakers had been at odds over the causes and solutions for the chip shortage. Car companies complain about a lack of transparency about how many chips are made and where they are sold. Chip makers have explained that the problem stems from the auto industry suddenly requiring chip suppliers to fill orders after the industry cut back orders due to the pandemic.
The chip shortage predate The Biden administration, but it has become the latest crisis for the administration after U.S. automakers were forced to cut production earlier this year because of chip shortages.
Economists point to chip shortages as a cause of inflation and add to pressure on Biden to ease it.
U.S. inflation hit its highest level in 12 years last month, fueling Republican attacks on Biden's spending plans. Meanwhile, a shortage of new cars that rely on chips has prompted many Americans to turn to the used-car market. Among the cost of living increases last month, used car prices surged by more than a third.http://www.kvpipe.com