President Joe Biden is calling for a whopping $50 billion in spending on semiconductor production and research amid a global semiconductor shortage that’s ravaged global supply chains. Part of the administration’s $2 trillion infrastructure bill, the proposals come as a diverse array of industries continue to announce production cuts and delays directly tied to scarce semiconductors. Additionally, this week, executives from Alphabet, AT&T, Intel, Samsung, and TSMC attended a virtual White House summit to discuss the shortage. For context, Biden passed an executive order in February requiring federal agencies to conduct a 100-day review of supply chains related to semiconductor chips and other critical industries.

Global semiconductor chip shortages are continuing to take a toll on production, with Apple and US car manufacturers hit especially hard.

• iPad display components and MacBook chip shortages have forced Apple to postpone production on a portion of units for both products until the second half of 2021, per Nikkei Asia.
• The shortage may also affect the production of next-generation MiniLED displays reportedly included in Apple’s yet-to-be-announced 12.9-inch iPad Pro, according to Bloomberg. Sources claim supply issues will force the devices to ship later and in smaller quantities than previously expected.
• General Motors recently announced it would reduce production and shut down two carmaking plants as a result of the shortage, following similar plant shutdowns by Stellantis and Ford.

In better news, multiple chip manufacturers have signaled an interest in building new US-based semiconductor factories.

• Last year, TSMC announced it would invest $12 billion to build a chip factory in Arizona with support from the state and US federal government.
• Last month, documents viewed by Reuters revealed Samsung is considering four US cities as locations for a new $17 billion chip factory.
• Weeks later, Intel announced it would spend $20 billion to build two new Arizona-based chip factories.

While all this investment may increase US semiconductor supplies long term, it does little to address the short-term production crisis. Biden’s proposed $50 billion investment in research and production and chip producers’ potential US-based factories will likely take years to bear fruit. TSMC’s Arizona plant, for instance, isn’t expected to start production until at least 2024. That disconnect exists because the current chip shortage is largely the product of pandemic-driven global supply shocks, according to Insider Intelligence forecasting analyst Rini Mukhopadhyay: “The pandemic has unexpectedly increased the use of electronics. Electronics that require semiconductor chips, such as VR headsets, are expected to face supply chain impediments despite sustained demand, which will affect consumer adoption,” she said. And those disruptions won’t stop anytime soon: Recent droughts affecting TSMC’s Taiwan chip factories nearly guarantee the current logjam will continue well into 2021.