[ad_1]
WASHINGTON – The Biden administration plans to invoke a Cold War-era national security law to force semiconductor supply chain companies to provide inventory and sales information of chips, Commerce Secretary Gina Raimondo said Thursday.
The aim is to alleviate the bottlenecks that have slowed US auto production and caused shortages in consumer electronics and identify possible hoarding, she said in an interview.
For months, his team has sought to clarify how companies allocate their semiconductor supply. But previous meetings that brought together companies from different industrial sectors did not lead to increased transparency, and many companies refused to provide trade data to the government.
The Commerce Department now requires companies to complete questionnaires within 45 days providing supply chain information. The request is voluntary, but Raimondo said he warned industry officials that she could use the Defense Production Act or other tools to force their hand if they don’t respond.
“What I told them was, ‘I don’t want to do anything mandatory, but if they don’t comply, they won’t give me a choice,” “she said. “I said today that we are evaluating all of our options right now, all of the tools. Hope not to go, but we need to see progress and we really need compliance. “
The production law gives the president broad authority to direct industrial production in times of crisis. The Trump and Biden administrations have each used it to speed up production and distribution of coronavirus vaccines and other pandemic-related medical supplies.
No specific companies
It is not clear exactly how Raimondo might use the law to gain information from semiconductor manufacturers or their customers, and she did not name any specific company.
A global shortage of chips that power everything from laptops to automobiles has continued to affect production in many industries, and finding medium to long-term solutions has been a priority since President Joe took office. Biden.
U.S. officials have repeatedly stressed that the private sector must step up efforts and provide more transparency if the government is to be successful in addressing the shortage.
Trade chief and director of the National Economic Council Brian Deese held meetings with businesses on Thursday to re-emphasize the point. Raimondo said the first session “went very well” and the participants were “extremely constructive”.
The demand for information – and the potential application through DPA or other means – is necessary because there is a lack of trust between companies in the supply chain, she said.
“There are allegations that some consumer companies buy two or three times what they need and stockpile,” Raimondo said. “So the suppliers say, ‘We can’t get an accurate demand signal because consumers are stocking, so we don’t know what the precise demand is.’ Some consumers say “We can’t get clear answers from suppliers, how come I was told I can have X and now I’m told I can only have half of X?” “
Forcing companies to reveal the details of their stocks would be of interest to investors. One of the biggest concerns about the massive increase in industry revenue and profits is that chip users are panicking buying more than they need and the resulting buildup of unused inventory will cause a crash. .
Delta propagation variant
The problems facing the supply chain now focus largely on the spread of the delta variant of the coronavirus in Southeast Asian countries like Malaysia and Vietnam, where semiconductor factories have had to close due to outbreaks and are now operating at reduced capacity.
Commerce and state departments, as well as embassies, will also set up an early warning system to ensure that virus-related production disruptions can be resolved more quickly.
The more formal process for responding to such shutdowns supersedes ad hoc responses that have taken place over the past six months, a U.S. official said, asking not to be identified to discuss private deliberations.
[ad_2]
Source link