Supply Chain

White House Shows Concern Over Chip Shortage

The administration is "identifying potential choke points in the supply chain" amid a shortage that has impacted automobile production around the w...
Matthew HellerFebruary 11, 2021
White House Shows Concern Over Chip Shortage

The Biden administration said Thursday it is working with the semiconductor industry to address a chip shortage that has impacted automobile production around the world.

The shortage has alarmed lawmakers, with Sen. Rob Portman, Ohio Republican, warning the White House last week that it “threatens our post-pandemic economic recovery, the consequences of which stand to be especially acute in dominant auto manufacturing states” such as Ohio.

General Motors, which has said the shortage could shave up to $2 billion from 2021 profit, has extended production cuts at three North American plants.

“The administration is currently 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,” White House press secretary Jen Psaki said at a briefing Thursday.

She added that the “longstanding issue with short supply of semiconductors was … one of the central motivations for the executive order the president will sign in the coming weeks to undertake a comprehensive review of supply chains for critical goods.”

“The review will be focused on identifying the immediate actions we can take, from improving the physical production of those items in the U.S., to working with allies to develop a coordinated response to the weaknesses and bottlenecks that are hurting American workers,” Psaki said.

As Fox Business reports, “Automakers around the world are shutting assembly lines because of problems in the delivery of semiconductors, which have been exacerbated in some cases by the former Trump administration’s actions against Chinese chip factories.”

U.S. chipmakers lead the world in designing and selling semiconductors, accounting for 45% to 50% of global sales, but manufacturing has shifted to Asia. Taiwan is home to the world’s largest contract chipmaker, Taiwan Semiconductor Manufacturing.

Other automakers affected by the shortage include Volkswagen, Ford Motor, Subaru, Toyota, Nissan, and Fiat Chrysler.

“We believe bold action is needed to address the challenges we face. The costs of inaction are high,” the Semiconductor Industry Association said Thursday in a letter to President Joe Biden. “We stand ready to work with you to achieve our shared goals.”