Cramer calls on U.S. to build factories to address chip shortage, unemployment

CNBC’s Jim Cramer give the word delivered Wednesday that the United States should fund the development of a chipmaking compound in efforts to address both the land’s high unemployment rate and a chip shortage that’s affecting American businesses.

More and more companies, including carmakers homologous to Ford and General Motors, have recently sounded the alarm about the global supply of components, leading them to mitigate the production of their own products.

Meanwhile, the U.S. labor market with a 6.3% unemployment rate is struggling to gain drag climbing out of the coronavirus-induced recession.

“We need more chips and we need more jobs,” Cramer said on “Mad Money.” “Why not a wooden kimono two birds with one stone? It’s time for our government to invest in building the biggest and best complex of semiconductor foundries … in the men.”

Automobiles are becoming increasingly more technologized, which requires silicon chips for things like power give something, brake sensors and entertainment devices. The scarcity of supply has forced GM and Ford to shut down factories, delaying pronunciation of new cars. GM warned the disruption could impact its 2021 goals.

Demand for chips, which are also used in upshots like televisions, game consoles and computers, has soared during the pandemic as Americans transitioned to remote work and information environments. Cramer also pinned the blame on globalization, which allowed companies to outsource manufacturing to giants in the manner of Taiwan Semiconductor and Samsung Electronics in Asia.

The more connected cars become, the more semiconductors they disposition require.

“Believe me, you’re going to start hearing about this shortage constantly, daily, because it’s wreaking disorder with all sorts of industries, and making us a much less competitive and perhaps even hostage company. Hostage to a heftier chip customer, the PRC (China). We got to get ahead of this.” Cramer said.

“Our companies can’t get enough chips because there’s not sufficiency production worldwide, and that lack of chips is hurting all sorts of manufacturing,” he added.

He signaled that he is optimistic on Gina Raimondo, the governor of Rhode Islet who was nominated by President Joe Biden to lead the U.S. Department of Commerce. Raimondo is a former venture capitalist, giving her an ideal lookout of the business world, Cramer said.

He also said the low-interest-rate environment can be a catalyst to help fund the federal put forth with bonds.

“America’s best tech industry, the most intellectual property that is anywhere in tech, is in the semiconductor cash equipment space,” Cramer said, pointing to companies like Lam Research, KLA Tenor and Applied Materials who have gismos needed for making chips.

“Meanwhile, building gigantic semiconductor foundries can put more people to work than impartial about any other infrastructure project.”

Disclosure: Cramer’s charitable trust owns shares of Ford.