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Intel Offers Support For Automakers During President Biden's Chip Crisis Meeting: Report

Intel Offers Support For Automakers During President Biden's Chip Crisis Meeting: Report
  • President Joe Biden’s executive video conferencing on Monday with 19 companies, including Ford Motor Co (NYSE: F), General Motors Co (NYSE: GM), Intel Corp (NASDAQ: INTC), Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL) and others to address the global chip crisis-induced production slowdown with auto manufacturing and other industries, and a possible technology overtaking by China prompted Intel to announce its chip production plans for car plants at its factories in the next six to nine months.
  • Leaders from Samsung Electronics Co Ltd (OTC: SSNLF), Dell Technologies Inc (NYSE: DELL), Micron Technology Inc (NASDAQ: MU), Northrop Grumman Corp (NYSE: NOC), Taiwan Semiconductor Manufacturing Co Ltd (NYSE: TSM), AT&T Inc (NYSE: T) and Cummins Inc (NYSE: CMI) planned to join the meeting.
  • Biden stressed the importance of semiconductor and broadband expansion to consolidate infrastructure. He acknowledged the bipartisan support for semiconductor funding under the infrastructure plan. He had previously planned to incur $50 billion in semiconductor manufacturing and research under the $2.3 trillion infrastructure plan. The infrastructure package had attracted Republican opposition as it imposed higher taxation on companies.
  • The global chip crisis was triggered by chip manufacturers’ preference for high margin smartphones and other consumer electronic devices, further accelerated by pandemic-induced remote working and entertainment at the cost of the low margin auto business. As a result, the automakers had to cut down on their production capacity. The crisis was estimated to endanger 1.3 million vehicle production.
  • The meeting participants stressed upon better semiconductor supply chain management. The automakers sought higher transparency regarding the demand-supply schedule and capacity utilization. Chip manufacturers sought clarity regarding actual demand to avoid ghost orders.
  • NVIDIA Corp (NASDAQ: NVDA) admitted to looming supply constraints over the following months.
  • Intel CEO Pat Gelsinger agreed to make some of its production capacity available to resolve the near-term crisis as a part of his broader plan to build its contract manufacturing business.
  • U.S.’s share of global semiconductor manufacturing declined from 37% in 1990 to 12% due to government subsidies to global competitors, the Semiconductor Industry Association said.
  • Price action: INTC shares traded higher by 0.07% at $65.45 in the premarket session on the last check Tuesday.

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Posted-In: Briefs Joe Biden Morning Show semiconductorsNews Tech Media

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