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Biden touts infrastructure proposal in chip-shortage meeting

FILE - In this Jan. 27, 2021 file photo, President Joe Biden signs an executive order on climate change, in the State Dining Room of the White House in Washington. More than 300 businesses and investors are calling on the Biden administration to set an ambitious climate change goal that would cut U.S. greenhouse gas emissions by at least 50% below 2005 levels by 2030. (AP Photo/Evan Vucci) (AP)Premium
FILE - In this Jan. 27, 2021 file photo, President Joe Biden signs an executive order on climate change, in the State Dining Room of the White House in Washington. More than 300 businesses and investors are calling on the Biden administration to set an ambitious climate change goal that would cut U.S. greenhouse gas emissions by at least 50% below 2005 levels by 2030. (AP Photo/Evan Vucci) (AP)
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  • Executives from Ford, GM, Intel, Alphabet and others discuss concerns about U.S. production capacity

President Biden called for a bipartisan push to strengthen the U.S. semiconductor industry during a meeting with auto and tech executives that he used to pitch his $2.3 trillion infrastructure proposal.

“I’ve been saying for some time now, China and the rest of the world is not waiting," Mr. Biden said Monday. “And there’s no reason why Americans should wait. We’re investing aggressively in areas like semiconductors and batteries; that’s what they’re doing and others, so must we."

Mr. Biden spoke during a meeting between top administration officials and senior executives of Ford Motor Co., General Motors Co., Intel Corp., Alphabet Inc. and others to address a global chip shortage that has led to production slowdowns with auto manufacturing and other industries. The executives appeared via video.

The White House signaled that no announcements or decisions were expected, characterizing the discussions as part of ongoing efforts to address the shortage.

After the meeting, the White House said participants emphasized the need to better track the semiconductor supply chain to help mitigate shortages. Transparency was a topic of discussion, according to a person familiar with the matter. Auto makers are seeking better insight from chip makers on how many will be available and when to inform production schedules. Chip manufacturers want a clearer picture of actual demand, hoping to avoid prospective so-called ghost orders that can be canceled, the person said.

Chips are used across an array of industries—in autos, for example, they are essential for software that controls everything from brakes to air bags. And their supply hasn’t kept up with pandemic-induced changes to work and entertainment habits and demand for certain devices.

Graphics-chips supplier Nvidia Corp., America’s largest semiconductor company by value, told investors Monday that supply concerns are likely to continue for months. “We expect demand to continue to exceed supply for much of this year," said company finance chief Colette Kress.

Intel Corp. Chief Executive Pat Gelsinger said Monday that the chip maker would make some of its production capacity available to others to help remedy near-term shortages, part of his broader plan to build its contract manufacturing business.

“Can I fix the industry, absolutely not. You know these are much larger than we can do ourselves," he said in an interview. “But if we start, I’ll say, surgically picking some of the key shortages, working with the key suppliers with them on our capacity…we believe that we can start helping in as little as six to nine months."

Mr. Biden’s $2.3 trillion infrastructure proposal includes $50 billion for the American semiconductor industry, whose lobbying efforts have gained momentum amid the shortage and fears that China might be overtaking the U.S. in a critical technology. The president said semiconductors, along with matters like expanding broadband, are critical for infrastructure.

National security adviser Jake Sullivan, who participated in the meeting, has said the shortage creates national security vulnerabilities. The administration had previously ordered a 100-day supply-chain review intended to shore up American supplies of chips, large-capacity batteries used in electric vehicles, pharmaceuticals and rare-earth elements, which are key to technology and defense.

The semiconductor money in Mr. Biden’s proposal would go toward building factories and research and design, and it has bipartisan support. The overall infrastructure package has drawn Republican opposition for its cost and because it would be funded through higher taxes on companies.

A bipartisan group of lawmakers sent a letter Monday to Mr. Biden asking him to use his upcoming budget request to push funding for semiconductor research and development and other related initiatives. They also asked him to work with allies to “outscale" China’s aggressive steps to build its own chip industry.

“If we lose these highly-skilled jobs and know-how to China, the United States will never recapture them," the letter reads. “Further, we risk dependence on a strategic competitor for the advanced semiconductors that power our economy, military and critical infrastructure."

The U.S. has lost ground on semiconductors to other countries, such as Japan, South Korea, Taiwan and China. The Semiconductor Industry Association said the U.S. share of global semiconductor manufacturing has fallen to 12% today from 37% in 1990, primarily because of government subsidies to global competitors that make it harder to attract new construction in the U.S.

Leaders from more than a dozen companies planned to join Monday’s meeting. The list included Samsung Electronics Co., Dell Technologies Inc., Micron Technology Inc., Northrop Grumman Corp., Taiwan Semiconductor Manufacturing Co., AT&T Inc. and Cummins Inc.

Fixing the industry’s broader capacity issues would take years given the time required to build new plants.

“This is becoming the fabric of every aspect of human existence," Intel’s Mr. Gelsinger said. “And as the world is becoming more digital, radically accelerated by Covid, we need to reverse a 25-year trend in the decrease in this industry on American soil."

This story has been published from a wire agency feed without modifications to the text.

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