White House press secretary Jen Psaki told reporters on Thursday that the administration is working to address the chip shortage by “identifying potential choke points in (the) supply chain and actively working alongside key stakeholders in industry and with our trading partners to do more now.”
She added that Biden is also looking at longer-term support for the industry.
Biden is expected to sign an executive order in the coming weeks to “undertake a comprehensive review of supply chains for critical goods,” including semiconductors, Psaki said.
A critical industry both for technology and defense
The shortage adds urgency to a longer-term conversation involving lawmakers and chipmakers about the need to increase US semiconductor manufacturing capacity.
Industry leaders say much more needs to be done.
“Our share of global semiconductor manufacturing has steadily declined from 37 percent in 1990 to 12 percent today,” the CEOs said in their Thursday letter to Biden. While the US share of global chipmaking has shrunk, China’s has grown and is now also around 12%, experts say.
“This is largely because the governments of our global competitors offer significant incentives and subsidies to attract new semiconductor manufacturing facilities, while the U.S. does not,” the group wrote. As a result, they said, US “technology leadership is at risk in the race for preeminence in the technologies of the future, including artificial intelligence, 5G/6G, and quantum computing.”
The industry group called the CHIPS Act an “important initial step” and urged Biden to allocate funding for such incentives, including tax credits or grants, as part of his administration’s recovery and infrastructure plans.
“Working with Congress, your administration now has an historic opportunity to fund these initiatives to make them a reality,” the group said. “We believe bold action is needed to address the challenges we face. The costs of inaction are high.”
Such advice could be instructive when the Biden administration carries out its review of semiconductor supply chains — part of the planned executive order Psaki said will be signed in the coming weeks.
“The review will be focused on identifying the immediate actions we can take, from improving the physical production of those items in the US to working with allies to develop a coordinated response to the weaknesses and bottlenecks that are hurting American workers,” Psaki said.