On Wednesday, President Joe Biden will sign an executive order aimed at solving a global semiconductor chip shortage that has prompted the White House and members of Congress to slash production and frightened U.S. automakers and other manufacturers, administration officials said.
When Biden meets a bipartisan group of U.S. lawmakers on Wednesday to address the crisis, the shortage, worsened by the pandemic, will be the topic.
Officials of the administration said Biden’s executive order, to be signed at 4:45 p.m. An immediate 100-day supply chain review for four essential goods will be launched by EST Wednesday: semiconductor chips, large-capacity electric vehicle batteries, rare earth minerals and pharmaceuticals.
Six sector assessments – modeled after the mechanism used by the Defense Department to reinforce the defense industrial base – would also be directed by the order. It will concentrate on security, public health, information technologies, transport, electricity and the development of foodstuffs.
Since the advent of the pandemic, which squeezed the availability of masks, gloves and other personal protection equipment, the United States has been besieged by supply shortages, affecting frontline staff.
The latest example of supply bottlenecks hurting American workers is the chip shortage, which in some cases causes automakers to take employees off production lines.
Make no mistake, we’re not just planning to get reports requested. We intend to take steps to close holes as we find them,” added the official of the administration.”
The chip shortage has increasingly evolved into a big headache for the White House.
Ford Motor Co recently said that a shortage of chips could reduce the production of the company by up to 20 percent in the first quarter, while General Motors said it was forced to cut production at factories in the United States, Canada and Mexico and would re-evaluate its production plans in mid-March.
According to the Semiconductor Industry Association, U.S. semiconductor firms account for 47 percent of global chip revenues but just 12 percent of production, since they have outsourced most of the manufacturing overseas. The U.S. accounted for 37 percent of the global production of semiconductors in 1990.
By investing in domestic production of next-generation semiconductor chips, Biden has been under pressure from Republican lawmakers to do more to secure American supply chains from China.
“I strongly urge the Biden administration to give priority to protecting emerging and critical technologies from the grasp of the CCP (Chinese Communist Party), such as semiconductors,” said the U.S. Representative Michael McCaul, in a recent letter from Republicans on the International Affairs Committee of the House of Representatives to the White House.
The White House would aim to diversify the supply chain reliance of the United States on specific goods, such as rare earth minerals from China, under Biden’s order.
If it can not manufacture such goods at home, it will look to grow some of the production in the United States and partner with other countries in Asia and Latin America, the official said.
The study would also look at restricting imports of some goods and educating U.S. employees to increase production at home.
In January, the supply chain executive order would add to Biden’s promise to exploit the U.S. government’s buying power, the world’s largest single purchaser of products and services, to strengthen domestic production and build new technology markets.
