Biden directs staff to address chip shortfall, seeks to boost US supply

WASHINGTON • US President Joe Biden said he is directing his administration to address shortfalls in semiconductor production that have idled production at some auto plants as he signed an order to review US supply chains.

He said he would seek US$37 billion (S$49 billion) in funding for legislation to supercharge chip manufacturing in the United States.

The scarcity, exacerbated by the pandemic, was also the subject of a discussion between Mr Biden and a bipartisan group of US lawmakers on Wednesday.

The White House said his remarks were in reference to measures aimed at boosting chip manufacturing capacity that were included in this year's National Defence Authorisation Act but which require a separate appropriations process to garner funding.

Mr Biden's executive order seeks to end the country's reliance on China and other adversaries for crucial goods. The administration's 100-day review will cover chips, along with large-capacity batteries, pharmaceuticals and critical minerals and strategic materials like rare earths.

The order does not directly call out China or any one country. Still, White House officials said an over-reliance on Beijing and other adversaries for critical goods is a key risk that must be addressed.

Mr Biden's review could lead to financial incentives, among other options, said one of the officials who spoke on condition of anonymity.

The President met a group of lawmakers from both parties at the White House on Wednesday afternoon to discuss the semiconductor shortage and ways to strengthen supply chains.

Senate Majority Leader Chuck Schumer said he is asking the chamber's top Democrats and Republicans to draw up legislation aimed at improving US competitiveness with China in manufacturing and technology, including bolstering the supply of American-made semiconductors.

Mr Biden's top economic adviser Brian Deese last week sought the Taiwanese government's help in resolving the chip situation.

His appeal followed earlier pleas from Japanese and European officials for Taiwan's assistance in ensuring supply.

The Biden administration has also asked US embassies around the world to identify how foreign countries and companies that produce chips can help address the global shortage and to map the steps taken to date.

The semiconductor industry has been pushing the US President to include tax breaks and other financial incentives in his next legislative package.

BLOOMBERG, REUTERS

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A version of this article appeared in the print edition of The Straits Times on February 26, 2021, with the headline Biden directs staff to address chip shortfall, seeks to boost US supply. Subscribe