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Exclusive: Car prices are surging. Elizabeth Warren blames corporate greed – CNN

Warren, in a new letter obtained by CNN, argues that the chip shortage, along with its aftermath, is a prime example of how real people can get hurt when a few companies become too dominant in their fields. The Massachusetts Democrat points out that just five firms control 54% of global semiconductor manufacturing, giving the biggest players “immense market power.”

“This market concentration has reduced competition, allowing giant corporations to deliver massive returns for shareholders,” Warren wrote in a letter sent Thursday to Commerce Secretary Gina Raimondo. “But it has harmed consumers by enabling these dominant companies to increase prices and underinvest in key capabilities, which has the effect of also reducing product innovation and product quality.

The Semiconductor Industry Association responded in a statement to CNN by saying the trade group agrees with Warren that America needs to encourage greater domestic chip making, but it pushed back on the senator’s other points.

Some of the Senator’s other assertions are simply wide of the mark,” said John Neuffer, CEO of the trade group. “The semiconductor industry is one of the world’s most fiercely competitive, innovative, and economically impactful sectors, revolutionizing entire segments of the economy and dramatically improving our way of life.”

‘Consumers are harmed

The pressure from Warren is the latest example of progressives arguing corporate greed is amplifying historic levels of inflation.

Last week, Warren blasted Hertz for binging on share buybacks instead of investing in new supply that could ease skyrocketing car rental rates.

Similarly, White House economists published a blog post last week that said “dominant” meat processors “use their market power to extract bigger and bigger profit margins for themselves,” contributing to the recent spike in meat prices.

To make her point on computer chips, Warren singled out Taiwan Semiconductor Manufacturing Co., a supplier to Apple, Nvidia and other tech companies, as one of the companies that has grown too powerful. She also said ASML, a Dutch company that trades on the Nasdaq, is the only company making machines required for cutting-edge chips, and it can’t keep up with demand.

“So while dominant semiconductor companies like TSMC and ASML post massive profits and reward shareholders,” Warren wrote, “consumers are harmed by shortages and higher prices.”

Neither company responded to requests for comment from CNN.

The Semiconductor Industry Association noted the industry has innovated rapidly over the years, and that evolution required significant investment.

“Today’s semiconductors are magical, containing tens of billions of transistors on a chip the size of a quarter,” the trade group said in the statement.”Unmatched by any other industry, the semiconductor industry has delivered breathtaking value to consumers. Fifty years ago, transistors were a billion times more expensive than they are today.”

Price spikes

Covid, not corporate concentration, is viewed by many as the near-term driver of the computer chip shortage. Consolidation took place over many years. There was no chip shortage prior to Covid.

The price spikes on cars are the most glaring example of how …….

Source: https://www.cnn.com/2021/12/16/business/elizabeth-warren-inflation-chip-shortage/index.html

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Is Norway the future of cars? – Kathimerini English Edition

The speed by which electric vehicles have taken over Norway has stunned even the cars’ enthusiasts. [Asya Demidova/The New York Times]

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