Cramer is asking the US to fund factories to address chip shortages and unemployment

CNBC’s Jim Cramer said Wednesday that the United States should fund the development of a chipmaking complex in an effort to address both the high unemployment rate nationwide and the lack of chips affecting U.S. business.

More and more companies, including automakers such as Ford and General Motors, have recently sounded the alarm about the global supply of components, prompting them to reduce production of their own products.

Meanwhile, the US labor market with an unemployment rate of 6.3% is struggling to gain traction out of the coronavirus-induced recession.

“We need more chips and we need more jobs,” Cramer told Mad Money. “Why not kill two birds with one stone? It’s time for our government to invest in building the largest and best semiconductor foundry complex … in the world.”

Cars are becoming more and more technological, which requires silicon chips for things like power steering, brake sensors and entertainment devices. The supply shortfall forced GM and Ford to close factories, delaying the delivery of new cars. GM has warned that the disruption could have an impact on its 2021 targets.

The demand for chips, which is also used in products such as televisions, game consoles and computers, increased during the pandemic as Americans switched to work and distance learning environments. Cramer also blamed globalization, which allowed companies to outsource production to giants such as Taiwan Semiconductor and Samsung Electronics in Asia.

The more connected the cars, the more semiconductors they will have.

“Believe me, you will start to hear about this shortage constantly, every day, because it wreaks havoc with all kinds of industries and makes us a much less competitive and maybe even hostage company. Hostage to a larger chip customer, PRC (China). We must overcome this. “Cramer said.

“Our companies cannot get enough chips because there is not enough global production and the lack of chips affects all kinds of production,” he added.

He said he was optimistic about Gina Raimondo, the governor of Rhode Island, who had been nominated by President Joe Biden to lead the US Department of Commerce. Raimondo is a former venture capitalist, giving him an ideal perspective on the business world, Cramer said.

He also said the low interest rate environment could be a catalyst to help fund the federal bond project.

“America’s best technology industry, the largest intellectual property that exists anywhere in technology, is in the semiconductor capital equipment space,” Cramer said, pointing to companies such as Lam Research, KLA Tenor and Applied Materials that have the machines. required for the manufacture of chips.

“Meanwhile, the construction of giant semiconductor foundries can employ more people than any other infrastructure project.”

Disclosure: The Cramer charity holds shares in Ford.