Biden’s latest effort to address the global microchip shortage

WASHINGTON — President Joe Biden will signal an govt order on Wednesday aimed toward addressing a global semiconductor chip shortage that has compelled U.S. automakers and different producers to minimize manufacturing and alarmed the White House and members of Congress, administration officers mentioned.

The shortage, exacerbated by the pandemic, can be the topic when Biden meets a bipartisan group of U.S. lawmakers on Wednesday to focus on the situation.

Administration officers mentioned Biden’s govt order, to be signed later Wednesday afternoon, will launch a right away 100-day evaluation of provide chains for 4 important merchandise: semiconductor chips, large-capacity batteries for electrical autos, uncommon earth minerals and prescription drugs.

The order may also direct six sector evaluations — modeled after the course of utilized by the Defense Department to strengthen the protection industrial base. It can be centered on the areas of protection, public well being, communications expertise, transportation, power and meals manufacturing.

The U.S. has been besieged by provide shortages since the onset of the pandemic, which squeezed the availability of masks, gloves and different personal protecting tools, hurting frontline staff.

The chip shortage, which in some instances is forcing automakers to take workers off manufacturing traces, is the latest instance of provide bottlenecks hurting American staff.

“Make no mistake, we’re not simply planning to order up reports. We are planning to take actions to close gaps as we identify them,” the administration official added.

The chip shortage has rapidly grown into a significant headache for the White House.

Ford Motor Co. not too long ago mentioned a scarcity of chips might minimize the company’s manufacturing by up to 20 p.c in the first quarter whereas General Motors mentioned it was compelled to minimize output at factories in the U.S., Canada and Mexico and would reassess its manufacturing plans in mid-March.

U.S. semiconductor corporations account for 47 p.c of global chip gross sales however solely 12 p.c of manufacturing, as a result of they’ve outsourced a lot of the manufacturing abroad, in accordance to the Semiconductor Industry Association. In 1990, the U.S. accounted for 37 p.c of global semiconductor manufacturing.

Biden has been below stress from Republican lawmakers to do extra to defend American provide chains from China by investing in home manufacturing of next-generation semiconductor chips.

“I strongly urge Biden administration to prioritize protecting emerging and critical technologies, like semiconductors, from the grasp of the CCP (Chinese Communist Party),” mentioned U.S. Rep. Michael McCaul, R-Texas, in a latest letter to the White House from Republicans on the House of Representatives Foreign Affairs Committee.

Under Biden’s order, the White House will look to diversify U.S. provide chain dependence for particular merchandise reminiscent of uncommon earth minerals from China.

It will look to develop a few of that manufacturing in the U.S. and companion with different nations in Asia and Latin America when it can’t produce such merchandise at dwelling, the official mentioned.

The evaluation may also have a look at limiting imports of sure supplies and practice U.S. staff to ramp up manufacturing at dwelling.

The provide chain govt order will add to Biden’s vow in January to leverage the buying energy of the U.S. authorities, the world’s greatest single purchaser of products and providers, to strengthen home manufacturing and create markets for brand spanking new applied sciences.

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