Microchip manufacturing companies in Texas halted production Thursday because of power cuts amid severe winter conditions in the US state.
The work stoppage could have a devastating effect on everything from electronics to the auto industry.
Samsung announced that it 'gradually halted operations' at a plant in Austin on orders by local power utility providers.
Dutch-American NXP semiconductors, which provides chips for automotive and digital networking industries, also stopped manufacturing in the same area.
Chipmakers in the US last week demanded that Congress provide federal funds to the critical industry, as some business groups are planning to send a letter to the White House later Thursday asking President Joe Biden to support the move.
The Semiconductor Industry Association (SIA), which represents 98% of the US semiconductor industry by revenue, sent a letter last Wednesday to Biden urging him to include substantial funding for semiconductor manufacturing and research in the administration’s economic recovery and infrastructure plan.
While the US had a share of 37% in global chip manufacturing during the 1990s, that figure fell to 12% as of last year, SIA noted.
'This decline is largely due to substantial subsidies offered by the governments of our global competitors, which have placed the US at a competitive disadvantage,' said the letter.
SIA President and CEO John Neuffer stressed semiconductors power essential technologies that include sectors such as health care, communications, clean energy, computing and transportation have kept the country and the economy afloat during the coronavirus pandemic.
Biden, meanwhile, has asked Taiwan for help to find a solution to the pandemic-caused global chip shortage that is hurting the American auto industry, according to his top economic adviser Brian Deese.
Extreme winter conditions have so far claimed at least 37 lives in multiple states, majority of them in Texas.
By Ovunc Kutlu