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How the CHIPS Act could help the auto industry

The bill comes 18 months into a disruptive global microchip shortage that has crimped auto production worldwide and sent average vehicle transaction prices soaring.

Automakers have cut 13.5 million vehicles out of their factory schedules since the start of 2021 because of the shortage, according to estimates by AutoForecast Solutions. That includes nearly 4.3 million vehicles axed at North American assembly plants.

The industry’s hunger for semiconductors will only grow in the years ahead as more electric vehicles are built and as infotainment offerings and driver-assistance systems become more advanced.

“Considering the computing power of today’s increasingly digital and connected vehicles, this bipartisan investment in domestic semiconductor manufacturing is a smart investment in the future,” John Bozzella, CEO of the Alliance for Automotive Innovation, said in a statement.

German supplier giant and semiconductor maker Robert Bosch, for example, estimates that microchips will account for about $800 of a vehicle’s value by the end of the decade, up from around $200 today.


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