US to Press for $37 Billion to Boost Chip Manufacturing Amid Shortfall

US President Joe Biden Calls for Coders in Hidden Message on White House Website

US President Joe Biden stated he would search $37 billion (roughly Rs. 2,67,750 crore) in funding for laws to supercharge chip manufacturing within the United States as a shortfall of semiconductors has compelled US automakers and different producers to chop manufacturing.

Biden additionally signed an govt order on Wednesday geared toward addressing the worldwide semiconductor chip scarcity that has alarmed the White House and members of Congress, administration officers stated.

The shortage, exacerbated by the pandemic, was additionally the topic of a dialogue between Biden and a bipartisan group of US lawmakers on the White House on Wednesday.

“I’m directing senior officials in my administration to work with industrial leaders to identify solutions to the semiconductor shortfall,” Biden stated on Wednesday. “Congress has authorised a bill but they need … $37 billion (roughly Rs. 2,67,750 crore) to make sure that we have this capacity. I’ll push for that as well.”

The White House said his remarks were in reference to measures aimed at boosting chip manufacturing capacity that were included in this year’s National Defense Authorization Act but which require a separate appropriations process to garner funding.

The chip industry has pressed the Biden administration and Congress to take action to fund the provisions of the law. “We urge the president and Congress to speculate ambitiously in home chip manufacturing and analysis,” the Semiconductor Industry Association (SIA) said earlier on Wednesday.

Biden’s executive order launched a 100-day review of supply chains for four critical products: semiconductor chips, large-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 be focused on the areas of defense, public health, communications technology, transportation, energy, and food production.

The United States has been besieged by supply shortages since the onset of the pandemic, which squeezed the availability of masks, gloves and other personal protective equipment, hurting frontline workers.

The chip shortage, which in some cases is forcing automakers to take employees off production lines, is the latest example of supply bottlenecks.

“Make no mistake, we’re not merely planning to order up experiences. We are planning to take actions to shut gaps as we determine them,” an administration official previewing the executive order said.

Democratic lawmakers present at Wednesday’s meeting were Senators Mark Warner, Tammy Baldwin, Tammy Duckworth, and Maggie Hassan along with Representative Doris Matsui. The Republicans comprised Senators John Cornyn, Mike Braun, Marsha Blackburn, Rob Portman, and Representatives John Joyce and Michael McCaul.

Production cuts

Ford Motor said a lack of chips could cut the company’s production by up to 20 percent in the first quarter. General Motors said it was forced to cut output at factories in the United States, Canada, and Mexico and would reassess production plans in mid-March.

Ford praised Biden’s plan on Wednesday and said in a statement that it was “extremely essential for our labor pressure, our clients and our enterprise that we’ve got a dedication to finish this scarcity as quickly as potential.”

US semiconductor companies account for 47 percent of global chip sales, but only 12 percent of global manufacturing is done in the United States, according to the Semiconductor Industry Association.

Biden has been under pressure from Republican lawmakers to do more to protect American supply chains from China by investing in domestic manufacturing of next-generation semiconductor chips.

“I strongly urge Biden administration to prioritise defending rising and significant applied sciences, like semiconductors, from the grasp of the CCP (Chinese Communist Party),” McCaul said in a recent letter.

Under Biden’s order, the White House will look to diversify the country’s supply chain dependence for certain products, by developing domestic production and partnering with other countries in Asia and Latin America when it cannot produce products at home.

The review will also look at limiting imports of certain materials and training US workers.

© Thomson Reuters 2021

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