Computer chip makers and some of their biggest customers joined forces today in an attempt to pressure the U.S. government to commit tens of billion dollars in funding toward semiconductor manufacturing and research.

The Semiconductors in America Coalition’s members include international chipmakers such as Intel Corp., Advanced Micro Devices Inc., Qualcomm Inc., Taiwan Semiconductor Manufacturing Co. Ltd., Samsung Electronics Ltd., Nvidia Corp. and Nvidia Corp., as well as big tech firms such as Amazon Web Services Inc.,, Google LLC, Microsoft Corp. and Apple Inc.

The group said today it is throwing its weight behind the CHIPS for America Act that was introduced in June 2020, with an aim to “appropriate $50 billion for domestic chip manufacturing incentives and research initiatives.” The CHIPS for America Act has been approved by the House and the Senate as part of the National Defense Authorization Act for 2021 but has not yet been funded.

U.S. President Joe Biden has also supported the act and has proposed that the $50 billion in funding would come from the $2.3 trillion infrastructure package deal presented to Congress last month.

The coalition cites the current global chip shortage as a reason for urgency and argues that it’s critical the U.S. does all it can to secure a long-term supply of semiconductors. The crippling shortage of chips is thought to be the result of an increase in demand resulting from the COVID-19 pandemic, and the impact has been felt by makers of cars, personal computers, smartphones, games consoles and TVs.

“Leaders from a broad range of critical sectors of the U.S. economy, as well as a large and bipartisan group of policymakers in Washington, recognize the essential role of semiconductors in America’s current and future strength,” John Neuffer, president and chief government officer of the Semiconductor Industry Association, a commerce group that represents semiconductor firms, told the New York Times.

In an open letter to Congress, the coalition said that by providing federal funding to the semiconductor industry, America would benefit from “more resilient supply chains to ensure critical technologies will be there when we need them.”

The group also made an interesting claim about the cost of semiconductor manufacturing in the U.S. versus other nations. It also noted that the U.S.’s global share of chip manufacturing has fallen from 37% in 1990 to 12% today because of to a lack of government investment.

“Governments around the world are offering significant subsidies to attract new semiconductor fabrication and research facilities,” it said. “As a result, it is 20%-40% more expensive to build and operate a fabrication facility in the U.S. compared to overseas.”

Analyst Holger Mueller of Constellation Research Inc. told SiliconANGLE that the current chip shortage is causing all kinds of economic problems and that throwing money at the problem might not be the best remedy. Rather, what’s really needed is better supply chain planning, he said.

“There was a time when economies all over the world competed to set up chip factories, but that has largely failed,” Mueller said. “Take Europe, where there is almost no chip manufacturing capacity anymore. The pandemic has shocked the system, but what’s required first and foremost is a rethinking of supply chains and stock levels. When we hear that a car is sitting idle in a factory waiting to be built due to a few missing $10 chips, that points to poor supply chain planning.”

Pund-IT Inc. analyst Charles King was also critical of the companies’ demand. “The idea of funding companies whose collective cash holdings are around ten-times the amount being suggested for CHIPS for America is a bit rich,” he said.

Interestingly, the Semiconductors in America Coalition is entirely absent of any automakers, who have been among the biggest victims of the chip shortage.

The automotive industry has taken a different stance, and in a letter to congressional leaders last week groups that included the American Automotive Policy Council, the Motor & Equipment Manufacturers Association and the United Auto Workers union, called on the government to give it more priority ahead of other industries. They said that part of Biden’s proposed $50 billion funding should go to “semiconductor facilities that commit to dedicating a portion of their capacity to motor vehicle-grade chip production.”

Other industries have urged the administration not to pick “winners and losers” or attach conditions to funding to address the chip shortage.

“It’s notable that automakers have a separate and largely different idea of what needs to be done,” King said. “I personally believe that building new chip fabs in the U.S. is good for both business and national security reasons. So I respect companies, like Intel. which have committed their own resources to fund new fabs in the U.S. That’s an approach that Apple, AWS, Google and others might be wise to study.”

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