President Joe Biden holds up a semiconductor
Doug Mills/The New York Times/Bloomberg
As the shortage of chips has disrupted manufacturing of cars and consumer electronics, the White House has slated a meeting for this afternoon to discuss the ongoing supply-chain problems.
Billed as a virtual CEO Summit on Semiconductor and Supply Chain Resilience, the meeting will include National Security Adviser Jake Sullivan, National Economic Council Director and Secretary of Commerce Gina Raimondo, as well as executives from some 20 major companies. The participants expected are a who’s who of industry, including General Motors, Ford, Chrysler parent Stellantis, Intel, Alphabet, Samsung, Dell, Micron Technology, Northrop Grumman and Medtronic. President Joe Biden is scheduled to join briefly.
The meeting comes as the chip shortage, which began after the coronavirus pandemic hit last year, has grown severe. A trade group that represents automakers, the Alliance for Auto Innovation, has said that the shortage could result in 1.28 million fewer vehicles being made in the United States this year. Beyond autos, the shortage of chips impacts a wide range of consumer products, including computers and mobile phones, as well as weapons systems.
The shortfall has revived calls from industry and members of Congress for more federal funding to shore up domestic chip production. About 75% of semiconductor manufacturing capacity, as well as many suppliers of key materials – including silicon wafers and specialty chemicals – are concentrated in China and East Asia, according to the Semiconductor Industry Association.
Intel said last month that it would spend $20 billion to build new chip factories in Arizona. Taiwan Semiconductor, meanwhile, said that it would invest $100 billion over the next three years to increase its plants’ capacity.
But it takes time to build a new fab or expand existing plants, so these efforts won’t solve the short-term problems. Expect this afternoon’s meeting to include a lot of talk about the problems that different companies and industries face as the Administration signals its seriousness to address the issues. But working out the long-term supply chain problems will take time.
