President Biden to issue executive order on chip shortages as under-pressure silicon world begs for help

CEOs say US needs to invest in home-fabbed tech


President Joe Biden intends to sign an executive order to tackle the shortage of chips, as the semiconductor world's top brass urged the Democrat to fund efforts to build more fabrication plants in the United States.

Chip manufacturers are struggling to meet global demand for components during the COVID-19 pandemic. Fabs were temporarily shut down during lockdown, leading to a backlog of orders. Meanwhile, millions of people working from home has sparked a surge in demand for chips for laptops, tablets, and the like, to the detriment of other industries, such as automotive and healthcare.

“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 in a briefing this week.

“The longstanding issue with short supply of semiconductors was - which was the question yesterday - is 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 move comes as leaders from top chip companies urged President Biden to step up efforts to invest in home-fabbed semiconductors for national security reasons. In a letter spearheaded by the Semiconductor Industry Association, the trade and lobbying group said the US had failed to construct more fabrication plants and invest more in chip R&D, unlike other governments around the world.

Experts warned America is in danger of falling behind its competitors in the race to develop and deploy technologies from AI and 5G to quantum computing. The letter was signed by executives from chip designers and manufacturers, such as AMD CEO Lisa Su, outgoing Intel CEO Bob Swan, and GlobalFoundries CEO Thomas Caulfield.

They called upon the Biden administration to provide grants and tax credits to build new semiconductor fabs as well as increase spending to fund scientific research in the States.

Citing a Pentagon study, the letter said America's global share of semiconductor manufacturing capacity had declined from 37 per cent in 1990 to 12 per cent today. The fabbing is now often outsourced to outfits outside of the US, such as Taiwan’s TSMC or South Korea’s Samsung.

“This is largely because the governments of our global competitors offer significant incentives and subsidies to attract new semiconductor manufacturing facilities, while the U.S. does not,” the letter said. “Others have also increased R&D investment substantially, while the U.S. investment in research has been relatively flat.”

Psaki said that the White House would look at how to improve chip production in the US, including ways to work with allies. ®


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