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(Add potential actions to increase chip supply)
WASHINGTON, Feb.24 (Reuters) – President Joe Biden will sign an executive order on Wednesday to address a global semiconductor chip shortage that has forced U.S. automakers and other manufacturers to cut production and alarmed the White House and members of Congress, administration officials said. .
Scarcity, exacerbated by the pandemic, will be the topic when Biden meets with a bipartisan group of U.S. lawmakers on Wednesday to discuss the issue.
Administration officials said Biden’s executive order, due to be signed Wednesday at 4:45 p.m. EST (9:45 p.m. GMT), would initiate an immediate 100-day supply chain review for four critical products: semiconductors, high capacity batteries for electric vehicles, rare earth minerals and pharmaceuticals.
The order will also lead six sector reviews – modeled on the process used by the Defense Ministry to strengthen the defense industrial base. It will focus on the areas of defense, public health, communication technologies, transport, energy and food production.
The United States has been besieged by supply shortages since the start of the pandemic, which has restricted the availability of masks, gloves and other personal protective equipment, injuring frontline workers.
The chip shortage, which in some cases forces automakers to pull their workers off production lines, is the latest example of supply bottlenecks hurting American workers.
“Make no mistake, we don’t plan to just commission reports. We plan to take steps to close the gaps as we identify them, ”the administration official added.
Earlier this month, a group of US chip companies urged Biden to provide “substantial funding for semiconductor manufacturing incentives” as part of its economic recovery and infrastructure plans. Last summer they backed bipartisan legislation to provide “tens of billions of dollars” to help pay for chipmaking and research.
The scarcity of chips quickly became a major headache for the White House.
Ford Motor Co recently said a shortage of chips could cut the company’s production by up to 20% in the first quarter, while General Motors said it was forced to cut production at factories in the United States. United States, Canada and Mexico and would reassess its production plans in mid-March.
U.S. semiconductor companies account for 47% of global chip sales, but only 12% of production because they have outsourced much of the manufacturing overseas, according to the Semiconductor Industry Association. In 1990, the United States accounted for 37% of world semiconductor production.
Biden, a Democrat, has come under pressure from Republican lawmakers to do more to protect U.S. supply chains from China by investing in domestic manufacturing of next-generation semiconductor chips.
“I urge the Biden administration to prioritize protecting emerging and critical technologies, such as semiconductors, from the grip of the CCP (Communist Party of China),” US Representative Michael McCaul wrote in a letter. recent address to the White House by Republicans in the House of Representatives. Committee on Foreign Affairs.
Under Biden’s order, the White House will seek to diversify the dependence of the United States supply chain for specific products such as rare earth minerals from China.
It will seek to expand some of that production in the United States and partner with other countries in Asia and Latin America when it cannot manufacture such products at home, the official said.
The review will also seek to limit imports of certain materials and train American workers to speed up production at home.
The supply chain executive order will add to Biden’s vow in January to leverage the purchasing power of the U.S. government, the world’s largest buyer of goods and services, to bolster domestic manufacturing and create markets for new technologies. (Reporting by Nandita Bose and Steve Holland in Washington; Additional reporting by Alexandra Alper; Editing by Leslie Adler and Jonathan Oatis)
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