No specific companies
It isn’t clear precisely how Raimondo might use the law to obtain information from semiconductor manufacturers or their customers, and she didn’t name any specific companies.
A global shortage of chips that power everything from laptops to automobiles has continued to affect production in many industries, and finding medium- and long-term solutions has been a priority since President Joe Biden took office.
U.S. officials have repeatedly emphasized that the private sector must step up and provide more transparency if the government is to successfully address the shortage.
The Commerce chief and National Economic Council Director Brian Deese held meetings with companies Thursday to stress that point again. Raimondo said the first session “went very well” and participants were “extremely constructive.”
The information request — and potential enforcement through DPA or other means — is necessary because there’s a lack of trust among companies in the supply chain, she said.
“There’s allegations of certain consuming companies buying two or three times what they need and stockpiling,” Raimondo said. “So suppliers say, ‘We can’t get a handle on an accurate demand signal because consumers are stockpiling, so we don’t know what the accurate demand is.’ Some consumers are saying ‘We can’t get straight answers from suppliers, how come I was told I could have X and now I’m being told I can only have half of X?’”
Forcing companies to reveal details of their stockpiles would be of interest to investors. One of the biggest concerns about the industry’s massive run-up in revenue and earnings is that chip users are panic buying more than they need and that the resulting accumulation of unused inventory will cause a crash.
Auto industry reaction
In a statement Thursday, automaker Stellantis — the company created by the merger of Fiat Chrysler and PSA Group — said it plans to cooperate.
“Stellantis will cooperate with U.S. Government-led initiatives aimed at improving transparency and alleviating ongoing constraints in global semiconductor supply chains,” the company statement said. “Broad participation from the entire semiconductor supply chain will be critical for these efforts to be successful.”
Ford Motor Co. said it appreciates the administration’s efforts to strengthen the nation’s critical supply chains and support American consumers and manufacturing.
“We encourage all members of the supply chain to support the Department of Commerce’s data collection process to improve transparency and address the semiconductor shortage,” Ford spokeswoman Melissa Miller said in a statement to Automotive News. “In the meantime, our teams are working to maximize production, with a continued commitment to building every high-demand vehicle for our customers with the quality they expect.”
The Alliance for Automotive Innovation, which represents Ford, GM, Stellantis and other major automakers in the U.S., also acknowledged the administration’s ongoing effort to address the “critical supply chain challenge.”
“Leaders from the semiconductor and automotive industries are working diligently to resolve the global chip shortage as quickly and efficiently as possible and are working to strengthen transparency and resiliency in the automotive semiconductor supply chain,” John Bozzella, CEO of the alliance, said in a statement. “Today’s discussion was an important opportunity to continue efforts to improve the automotive semiconductor supply chain and set the foundation for mid- and long-term capacity solutions.”
Delta variant spread
The issues facing the supply chain now largely center around the spread of the coronavirus delta variant in Southeast Asian countries like Malaysia and Vietnam, where semiconductor plants had to shut down because of outbreaks and are now operating at reduced capacity.
The Commerce and State Departments, along with embassies, will also set up an early alert system to ensure that virus-related disruptions in production can be addressed faster.
The more formal process to react to such shutdowns replaces ad-hoc responses that have occurred over the last six months, a U.S. official said, asking not to be identified discussing private deliberations.
Audrey LaForest of Automotive News contributed to this report.
