President Joe Biden isn’t relying completely on an executive order to handle chip shortages. According to The Verge who reported that the Biden administration has issued its first budget proposal.
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The plan is looking to spend $150 million to establish two Manufacturing Innovation Institute programs that include one for domestic chip production. According to the plan, the institute would help the US reclaim its title as a “global leader” in semiconductor manufacturing.
However, the plan doesn’t outline exactly how the institute would accomplish its objectives, or which companies might get support from it. Intel and Samsung are two of the best-known companies with US-based chip plants, while TSMC will start building an Arizona factory later this year.
The funds would be just a small part of a larger $1.5 trillion package that would also support clean energy projects, expand rural broadband access and spur the adoption of electric vehicles in government.
For now, there’s no assurance that the manufacturing plan will work. The institute doesn’t amount to a direct investment, and its success will depend on its exact approach. But, it reflects mounting concerns that a lack of US-based production is hurting the country.
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Ford, GM, Apple, and other brands are either known or rumored to be grappling with manufacturing issues related to chip shortages. If the budget moves forward, it could help ease that strain and help the US reduce the chances of a future crisis.