Biden team pledges aggressive steps to address chip shortage

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WASHINGTON — The Biden administration is working to address the global semiconductor shortage that has caused auto manufacturers and other U.S. industries to halt production, a White House official said.

The administration is identifying choke points in supply chains and discussing an immediate path forward with businesses and trading partners, the official said in a statement to Bloomberg News. In the longer term, the administration is looking for a comprehensive strategy to avoid bottlenecks and other issues the semiconductor industry has been facing for years.

President Joe Biden is expected to sign an executive order directing a government-wide supply chain review for critical goods in the coming weeks. The chip shortage is a central reason for the order.

On Thursday, CEOs of chip companies including Intel Corp., Qualcomm Inc. and Advanced Micro Devices Inc. wrote the president to urge him to support domestic production and stop the country from losing its edge in innovation.

The executives, who sit on the board of the Semiconductor Industry Association, asked Biden to include “substantial funding for incentives for semiconductor manufacturing, in the form of grants and/or tax credits” in his recovery and infrastructure plans.

The letter, signed by 21 CEOs including Bob Swan of Intel Corp., Steve Mollenkopf of Qualcomm Inc. and Lisa Su of Advanced Micro Devices Inc., highlighted that the country’s global share of chip manufacturing has dropped to 12 percent from 37 percent in 1990.

U.S. companies mostly outsource production to Taiwan Semiconductor Manufacturing Co. and South Korea’s Samsung Electronics Co. That’s becoming a national security issue as tensions rise between the U.S. and China, which is investing heavily to expand its own chip industry.

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Saurabh Shukla

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