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WASHINGTON (AP) – President Joe Biden said Wednesday that he would seek funding for legislation to boost chip manufacturing in the United States as semiconductor shortages have forced automakers and other American manufacturers to cut back on production.
Biden also signed an executive order on Wednesday aimed at addressing the global semiconductor chip shortage that has alarmed the White House and members of Congress, administration officials said.
The shortage, exacerbated by the pandemic, was also the subject of a discussion between Biden and a bipartisan group of US lawmakers at the White House on Wednesday.
“I am directing senior officials in my administration to work with industry leaders to identify solutions to the semiconductor deficit,” Biden said Wednesday. “Congress has cleared a bill, but they need … $ 37 billion to make sure we have this capability. I will also push to make it happen.”
His comments were an apparent reference to measures aimed at boosting chip-making capacity that were included in this year’s National Defense Authorization Act, but which require a separate appropriations process to obtain funding.
The chip industry has lobbied the Biden administration and Congress to take steps to fund the provisions of the law. “We urge the president and Congress to invest ambitiously in domestic chip research and manufacturing,” the Semiconductor Industry Association (SIA) said Wednesday.
Biden’s executive order launched a 100-day review of supply chains for four critical products: semiconductor chips, high-capacity batteries for electric vehicles, rare earth minerals and pharmaceuticals.
The order also directs six sector reviews, modeled after the process used by the Defense Department to strengthen the defense industrial base. It will focus on the areas of defense, public health, communications technology, transportation, energy and food production.
The United States has been beset by supply shortages since the start of the pandemic, which reduced the availability of masks, gloves and other personal protective equipment, hurting front-line workers.
The chip shortage, which in some cases forces automakers to pull employees off production lines, is the latest example of supply bottlenecks.
“Make no mistake, we are not simply planning to order reports. We are planning to take action to close the gaps as we identify them,” said an administration official who anticipated the executive order.
The Democratic lawmakers present at Wednesday’s meeting were Senators Mark Warner, Tammy Baldwin, Tammy Duckworth and Maggie Hassan along with Rep. Doris Matsui. The Republicans consisted of Senators John Cornyn, Mike Braun, Marsha Blackburn, Rob Portman, and Representatives John Joyce and Michael McCaul.
PRODUCTION CUTS
Ford Motor Co recently said a lack of chips could reduce the company’s production by as much as 20 percent in the first quarter. General Motors Co said it was forced to cut production at factories in the United States, Canada and Mexico and would re-evaluate production plans in mid-March.
Ford praised Biden’s plan on Wednesday, saying in a statement that it was “incredibly important to our workforce, our customers and our business that we are committed to ending this shortage as soon as possible.”
American semiconductor firms account for 47 percent of global chip sales, but only 12 percent of production because they have outsourced much of the manufacturing overseas, according to the SIA. In 1990, the United States accounted for 37 percent of world semiconductor production.
Biden has been under pressure from Republican lawmakers to do more to protect China’s American supply chains by investing in domestic manufacturing of next-generation semiconductor chips.
“I strongly urge the Biden administration to prioritize the protection of critical and emerging technologies, such as semiconductors, from the reach of the CCP (Chinese Communist Party),” Representative McCaul said in a recent letter.
Under Biden’s order, the White House will seek to diversify the dependence of the country’s supply chain for certain products, developing domestic production and partnering with other countries in Asia and Latin America when it cannot produce products at home.
The review will also seek to limit imports of certain materials and train American workers.
(Reporting by Trevor Hunnicutt and Nandita Bose in Washington; Additional reporting by Steve Holland and Alexandra Alper in Washington; Editing by Sonya Hepinstall and Matthew Lewis)
