WASHINGTON (US) – President Joe Biden will sign an executive order on Wednesday, which intends to address a global semiconductor chip shortage that has prompted US automakers and other manufacturers to bring down production and alarmed the White House and members of Congress, administration officials said.
The scarcity triggered by the pandemic, will be the topic of discussion when Biden meets a bipartisan group of US lawmakers on Wednesday to discuss the issue.
Administration officials said Biden’s executive order, to be signed at 4:45 p.m. EST Wednesday, will have an immediate 100-day evaluation of supply chains for four critical products: semiconductor chips, large-capacity batteries for electric vehicles, rare earth minerals and pharmaceuticals.
The order will also look into six sector reviews, modeled after the process used by the Defense Department for bolstering the defense industrial base. It will delve into the areas of defense, public health, communications technology, transportation, energy and food production.
The United States has been affected by supply shortages since the beginning of the pandemic, which in turn had an impact on the availability of masks, gloves and other personal protective equipment, hurting frontline workers.
“Make no mistake, we’re not simply planning to order up reports. We are planning to take actions to close gaps as we identify them,” the administration official added.
Ford Motor Co recently said a lack of chips could bring down the company’s production by up to 20% during the first quarter while General Motors said it was forced to cut output at factories in the United States, Canada and Mexico and would conduct an evaluation of its production plans again in mid-March.
US semiconductor firms account for 47% of global chip sales but only 12% of production, as much of the manufacturing have been outsourced overseas, according to the Semiconductor Industry Association.
Biden has been pressured by Republican lawmakers to take more actions to safeguard American supply chains from China by investing in domestic manufacturing of next-generation semiconductor chips.
US Representative Michael McCaul, in a recent letter to the White House from Republicans on the House of Representatives Foreign Affairs Committee, said, “I strongly urge Biden administration to prioritise protecting emerging and critical technologies, like semiconductors, from the grasp of the CCP (Chinese Communist Party).”
Under Biden’s order, the White House will aim for diversifying the dependence of United States’ supply chain for specific products such as rare earth minerals from China.
The official said that it will look to develop some of that production in the United States and team up with other countries in Asia and Latin America during times when it cannot produce such products at home.
The review will also look at putting restraints on the imports of certain materials and train US workers to speed up production at home.