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UPDATE 1-FCC studying impact on chips shortage on U.S. communications sector

05/11/2021 20:35
UPDATE 1-FCC studying impact on chips shortage on U.S. communications sector

Adds more details, quote from FCC chair

By David Shepardson

- The Federal Communications Commission (FCC) on Tuesday said it was seeking comments on the impact the continuing global shortage of semiconductors is having on the U.S. communications sector.

The supply shortage has especially hit the U.S. auto industry hard, the FCC noted, as automakers have sharply cut production because of a lack of chips. Ford Motor Co F.N has warned the shortage could halve second-quarter production. nL1N2ML3FW

An industry group warned in April that broadband providers were facing chip delays, resulting in delays delivering some cable TV boxes and seeing delayed "network switches, routers, and servers."

The group said semiconductors shortages "will result in hundreds of millions of dollars in impact to the broadband and cable television industry this year."

The FCC asks "what steps can be taken to prevent similar challenges in the future, particularly those challenges related to unanticipated, catastrophic, global events?" and to what extent shortages are driving "changes to the communications industry more broadly."

"We are pursuing a proactive strategy to help build a more secure, resilient, and next-generation communications supply chain," said Acting FCC Chairwoman Jessica Rosenworcel in a statement.

On Tuesday, some of the world's biggest chip buyers, including Apple Inc AAPL.O, Microsoft Corp MSFT.O and Alphabet Inc's GOOGL.O Google, joined top chip-makers such as Intel Corp INTC.O to create a new lobbying group to press for government chip manufacturing subsidies.

The new group asked U.S. lawmakers to provide funding to boost U.S. chips production, for which President Joe Biden has asked Congress to provide $50 billion.

Automakers want the Biden administration to secure chip supply for car factories nL1N2MG2OJ but tech companies oppose favoring a single industry.

Tech companies such as Apple are also being hit by the chip shortage, but less severely.

The iPhone maker said last month it will lose $3 billion to $4 billion in sales in the current quarter ending in June because of the chip shortage, but that equates to just a fraction of the $72.9 billion in sales analyst expect for Apple's fiscal third quarter, according to Refinitiv revenue estimates. nL1N2MX2MK

(Reporting by David Shepardson; Editing by Leslie Adler & Shri Navaratnam)

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