Biden to Address Chip Shortages, Semiconductor Supply Chains

Biden to Address Chip Shortages, Semiconductor Supply Chains

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Update: Clarified specifics pertaining to the industry letter.

If you’re still disappointed at not being able to buy a Ryzen 5000 series chip yet, you’ve apparently got some friends in high places. President Biden is just as annoyed as you, according to a new statement from White House Press Secretary Jen Psaki, and is working to bring the global semiconductor shortage to an end as quickly as possible.

The Biden administration is “currently identifying potential chokepoints in the [semiconductor] supply chain and actively working alongside key stakeholders in industry and with our trading partners to do more now,” Psaki said.

Alongside these discussions, Psaki said that Biden also plans to sign an executive order in the coming weeks that would direct a comprehensive review of supply chain issues for critical goods, including chips. 

Two people familiar with the review’s specifics told Bloomberg that it will last 100 days and will be led by the National Economic Council and National Security Council. Plans are to focus on semiconductor manufacturing and advanced packaging, as well as critical minerals, medical supplies and high-capacity batteries such as those used in electric vehicles.

The American auto industry also stands to gain from a more available supply of chips as well, with the United Auto Workers union releasing its own statement saying that “we also call on the Biden administration and Congress to develop trade and policy solutions that ensure that advanced technology that has been offshored is brought back and produced by UAW workers here in the U.S.” The statement follows a January 19th letter the union sent to the Biden administration asking the President to “consider urging major silicon wafer foundries to ramp up production of automotive-grade wafers.”

As such, we can’t say how much of a role consumer electronics will play in Biden’s plans.

National security is also a concern, especially given increased trading tensions between the United States and China within the past year. While TSMC is based in Taiwan, the political situation between Taiwan and China is still fraught.

Other moves are also developing in the semiconductor industry, with a letter sent to the President earlier today that was signed by the CEOs of Intel, AMD, and Qualcomm and which urged his administration to increase government support for domestic chip production, long a challenging issue due to foreign subsidies for chip R&D and manufacturing plants. This is in itself enlightening, given that both AMD and Qualcomm currently rely on foreign partners for chip production. “Our 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 letter states.

18 other CEOs signed the letter, which pointed out that the United States’ share of chip manufacturing has fallen by 12% since 1990. The letter’s specific demands include “substantial funding for incentives for semiconductor manufacturing, in the form of grants and/or tax credits.”

While it sounds like much of the lobbying pressure facing the Biden administration is focused on bringing chip production under American companies’ purview, it’s also possible that the President’s solutions may also piggyback off the previous administration’s work with TSMC to build a factory in Arizona.