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Telecom, automotive industries quarrel over chip supplies

The automotive industry is asking lawmakers to set aside funds specifically for their chipset needs. But one telecom group called that request 'plainly inappropriate.'

Mike Dano

July 6, 2021

3 Min Read
Telecom, automotive industries quarrel over chip supplies

There's a looming shortage of silicon components for electronics of all shapes and sizes. And as the supply of such chipsets tightens, companies are beginning to fight over what's left.

According to the American Automotive Policy Council trade association, the US government should set aside money "dedicated to support the construction [of] US semiconductor manufacturing facilities that are capable of making auto-grade wafers/chips."

Similarly, according to the Alliance for Automotive Innovation trade group, the US auto industry has been "uniquely" affected by the ongoing chip shortage, and as a result "at least some portion" of spending to rectify the situation "should be used to build new capacity in the United States that will support the auto industry and its workers."

But some telecom industry trade groups aren't buying that argument. The NCTA – The Internet & Television Association told the FCC that the US auto industry should not receive special treatment, particularly at the expense of chips for broadband networks.

"Sector-specific set-asides for the automotive industry are plainly inappropriate when so many sectors of our global economy are reliant on semiconductor chips, each weathering the same shortage," the group wrote in response to an FCC probe into the shortages and how they might affect the country.

NCTA continued: "To the extent such set-asides might reduce semiconductor availability for the communications sector and the critical infrastructure and services it supports, such a policy would conflict with national broadband deployment goals and undermine economic growth. If the pandemic has taught us anything, it is that broadband is the seminal technology of the 21st century and that continued investment in, and support for, broadband networks is critical to fostering economic growth that is both robust and equitable. The commission should not be swayed by the auto sector's request for preferential status."

The global chipset shortage has ballooned into a major issue among policymakers and companies across a wide range of industries. In the telecom industry, companies are reportedly ordering their products months earlier than they normally would, in order to ensure the supply of needed equipment won't be affected. And suppliers ranging from Infinera to Samsung to Apple have warned that the issue will significantly cut into their expected revenues in the coming months.

In response, chipmakers like Intel and TSMC continue to consider expanding their US operations. And US lawmakers may inject billions of additional dollars into the space to bolster the domestic supply of silicon. However, few expect such efforts to result in a quick increase in the supply of chipsets, thus creating shortages that may stretch into next year.

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Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano

About the Author(s)

Mike Dano

Editorial Director, 5G & Mobile Strategies, Light Reading

Mike Dano is Light Reading's Editorial Director, 5G & Mobile Strategies. Mike can be reached at [email protected], @mikeddano or on LinkedIn.

Based in Denver, Mike has covered the wireless industry as a journalist for almost two decades, first at RCR Wireless News and then at FierceWireless and recalls once writing a story about the transition from black and white to color screens on cell phones.

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