The global shortage of computer chips is fueling inflation from iPhones to new cars. According to Gina Raimondo, Commerce Secretary, this disruptive shortage is likely to continue “deep into 2022.” Computer chips are essential components for the Biden administration’s climate goals. Every electric vehicle contains approximately 2,000 chips, roughly twice the amount of a traditional car. According to the Semiconductor Industry Association, only 12% of all world’s computer chip production was done in America last year, a decrease of 37% from 1990. The Biden administration champions the CHIPS for America Act (a $52 billion bill) to encourage domestic semiconductor production.
Although Congress approved the legislation last year, lawmakers are still working on it to ensure that the provisions are funded. The US Senate funded the legislation in June. However, it has not been voted on by the House. Even if Congress approves the legislation, it will still take many years to build and scale up new chip factories fully.
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