Supply-Chain Crunch, Chip Shortage Focus of White House Meeting
Biden administration urges companies to volunteer information about their supply chains
WASHINGTON—Auto makers, technology companies and semiconductor producers met Thursday with Biden administration officials amid a global chip shortage, as the federal government pitched a program for companies to reveal more information about their supply chains.
The goal is to “understand and quantify where bottlenecks may exist,” the White House said in a statement after the meeting. Commerce Secretary Gina Raimondo asked business leaders to respond to the voluntary request for information in the next 45 days.
Companies that participated in the White House talked included Apple Inc., Ford Motor Co. , General Motors Co. , Intel Corp. , Medtronic, Samsung Electronics Co. , Stellantis NV and Taiwan Semiconductor Manufacturing Co.
The administration is also ratcheting up what it calls an early-alert system to mitigate semiconductor plant shutdowns related to the spread of Covid-19’s Delta variant. U.S. diplomats to countries in Southeast Asia including Malaysia and Vietnam will be asked to work with governments to keep factories running while ensuring Covid-19-related worker protections are in place, officials said.
The chip crisis has squeezed a range of industries, from auto manufacturing to consumer electronics and medical equipment, causing prices to rise for consumers. Short-term solutions have been elusive.
Supply hasn’t kept up with pandemic-induced changes in work and entertainment habits and demand for devices such as tablets. U.S. auto makers, which cut chip orders at the onset of the pandemic only to see rising demand from other industries, have been forced to slow or cease assembly lines. The price of new and used cars has risen.
The issue of transparency came up during an April meeting that Mr. Biden held with auto and tech executives. Auto makers sought insight from chip makers on how many semiconductors will be available and on setting production schedules. Chip manufacturers sought a clearer picture of actual demand, hoping to avoid so-called ghost orders, which can be canceled.
The White House is pressing Congress to provide funding for bipartisan legislation known as the Chips for America Act, designed to encourage domestic semiconductor investment. While the Senate approved $52 billion in June, the House hasn’t taken action on the measure.
The U.S. has lost ground on semiconductors to Japan, South Korea, Taiwan and China. The Semiconductor Industry Association said the U.S. share of global semiconductor manufacturing fell to 12% in 2020 from 37% in 1990. China and others have provided subsidies to global competitors, making it harder to attract new plant construction in the U.S.