"There is not a single supply-chain shortage with a greater impact on the U.S. economy than the shortage of automotive-grade semiconductors," the American Automotive Policy Council, which represents Ford Motor Co., General Motors and Stellantis, said in a statement Monday.
The lack of chips prevented 1.5 million vehicles from being produced in the U.S. last year, according to the alliance, leaving dealerships with lower-than-normal levels of new-vehicle inventory.
Sens. Gary Peters and Debbie Stabenow, both Michigan Democrats, worked to secure the $2 billion incentive fund dedicated to support legacy chip production for critical manufacturing sectors, including the auto industry.
"Dedicated funds to support the domestic production of semiconductor technologies will give the automotive industry—and specifically the automotive supply chain — a greater competitive advantage around the globe," Julie Fream, CEO of the Original Equipment Suppliers Association, told reporters Tuesday during a virtual press briefing.
But building a semiconductor fabrication plant can take "at least two years," she noted, so it will take time for supply woes to fully ease.
"This problem only gets bigger as time goes on," Peters said in a response to a question from Automotive News.
As the auto industry transitions to electric vehicles and adds more automated features and advanced safety technologies, more chips will be needed, he added.
"The demand for chips is increasing every single year, dramatically," Peters said. "We have to get in front of this problem. ... We have to start building these facilities now."