FCC Studying Chip Shortage Impact On U.S. Communications Sector

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On Tuesday, the Federal Communications Commission (FCC) announced it was compiling information on the impact of the global semiconductor shortage on the U.S. communications sector.

The U.S. auto industry is feeling the brunt of the shortage, with automakers slashing production. Ford Motors has warned that the shortage could cut production by 50% in the second quarter.

Broadband providers also experienced chip delays, leading to a slowdown in shipments of cable TV boxes including network switches, routers, and servers. Broadband providers said this will certainly affect revenue generation this year.

The FCC is looking for ways to prevent a similar shortfall in the future, especially those challenges caused by unforeseen global events.

On May 4, 2021, some of the world’s largest chip buyers formed a lobby group to push for government subsidies for chip production, including top companies such as Apple Inc, Microsoft Corp, Google, and Intel Corp.

The Biden administration had asked Congress for $50 billion.

Automakers want the government to guarantee chip supply to the auto industry, but technology companies refuse to favor a single industry.

Apple, for its part, said that it would lose $3-4 billion in revenue in the current quarter due to the chip shortage, but that is still only a small fraction of the $72.9 billion in sales analysts expect for the iPhone maker’s third fiscal quarter.

For more information, read the original story in Reuters.

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