Amazon warns against car industry getting special treatment in efforts to fix chip shortage

Amazon has warned against the car industry receiving special treatment to address the chip shortage crisis that has shut factories around the world.

The technology giant told a review into Joe Biden’s plans to provide billions in subsidies for US chip manufacturing that a wide range of products from data centres to satellites were at risk from the shortage.

“Any government incentives and efforts to diversify the semiconductor supply chain should be made across the board, for access by and for the benefit of all users and customers of semiconductor technology,” the company said in its response to a consultation. 

“No single sector should be favoured over other sectors, as semiconductor technology underlies a large variety of industries.”

The Biden administration is proposing to spend $50bn (£36bn) in subsidies for chip research and manufacturing, an effort to ease the current shortage of chips and to ease reliance on Asia, where the majority of advanced semiconductors are made.

While Amazon did not name the automotive industry, carmakers have said that a portion of this funding should be reserved for manufacturers who commit to setting aside supplies for vehicles.

The American Automotive Policy Council, which is backed by Ford, GM and the Fiat-Peugeot group Stellantis, said in its submission that 25pc of funding should go to facilities that allocate 25pc of their capacity to automotive chips. Carmakers have been particularly badly hit by the chip shortage, after cancelling orders in the uncertain early months of the pandemic left them with a lack of chips when demand unexpectedly improved.

The likes of Jaguar Land Rover, Ford and GM have shut factories or cut production in recent weeks. However, Amazon said that the shortages could hit multiple other areas, including its cloud computing business AWS, its Kindle and Echo devices, driverless car systems and internet satellites.

“Semiconductor supply constraints could slow down and hamper the progress of these development efforts,” it said. The company was joined by Silicon Valley lobby group the Information Technology Industry Council, which said the subsidies should come without “distorting the incentives or the semiconductor market by favouring some sectors or applications over others”.