Amid Semiconductor Shortage, Auto Industry Seeks Aid from White House’s $37 Million Proposal to Bolster Production

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In early 2020, as the COVID-19 pandemic began to shut down wide swaths of the global economy, automakers braced for the worst — a downturn far steeper than even the Great Recession. Sales did tumble initially, but the latter half of the year saw a strong recovery. Circumstances, however, nonetheless conspired to once again force the U.S. auto sector to ask Washington for help. Industry group the Alliance for Auto Innovation (AAI), according to Reuters, called for part of billions in proposed aid for semiconductor manufacturing to be reserved for its members. As the pandemic closed vehicle plants and sent demand for electronics soaring last spring, the world’s semiconductor makers diverted their chips to the latter segment — resulting in the ongoing shortage of chips for vehicles. The AAI, responding to a government review, said the shortage could disrupt production for another six months and lead to nearly 1.3 fewer vehicles being produced this year.

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