Cramer calls on US to fund plants to address unemployment shortages

Jim Cramer, CNBC, said on Wednesday that the United States should fund the development of a chipmaker in efforts to address the country’s high unemployment rate and a shortage of chips affecting U.S. businesses.

More and more companies, including car manufacturers such as Ford and General Motors, have recently sounded the alarm about the worldwide supply of components, which has led them to reduce their own products.

Meanwhile, the US labor market is struggling with an unemployment rate of 6.3% to gain a foothold emerging from the coronavirus-induced recession.

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

Cars are becoming more and more technological, requiring silicone chips for things like power steering, brake sensors and entertainment devices. The scarce supply forced GM and Ford to close factories, which delayed the delivery of new cars. GM has warned that the disruption could affect its 2021 targets.

Demand for chips, which are also used in products such as televisions, game consoles and computers, rose during the pandemic as Americans switched to remote work and learning environments. Cramer also blamed globalization, which allowed companies to outsource manufacturing to giants such as Taiwan Semiconductor and Samsung Electronics in Asia.

The more coupled motors become, the more semiconductors they need.

“Believe me, you are constantly going to start hearing about this shortage on a daily basis, because it is wreaking havoc with all sorts of industries and making us a much less competitive and maybe even hostage business. We have to come for this. ”Cramer said.

“Our companies cannot get enough chips because there is not enough production worldwide, and the lack of chips harms all types of manufacturing,” he added.

He has indicated that he is optimistic about Rhode Island’s Gina Raimondo, who has been nominated by President Joe Biden to head the US Department of Commerce. Raimondo is a former venture capitalist and gives her an ideal perspective on the business world, Cramer said.

He also said that the low interest rate environment could be a catalyst to fund the federal project with bonds.

“America’s best technology industry, the most 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 require machines to make chips .

“Meanwhile, building giant semiconductor foundries can put more people to work than almost any other infrastructure project.”

Disclosure: Cramer’s charity owns shares in Ford.