President Biden signed an executive order Wednesday addressing growing concern over a global semiconductor shortage hampering the production of goods like automobiles and smartphones.
The White House’s executive order directs the federal government to conduct 100-day reviews of supply chains in four sets of products, including computer chips and large capacity batteries, like those used in electric vehicles, according to administration officials.
“This is about making sure the United States can meet every challenge we faced in this new era of pandemics, but also in defense cybersecurity, climate change, and so much more,” Biden said at a press conference Thursday. “The best way to do that is by protecting and and sharpen and America’s competitive edge by investing here at home.”
The chip shortage was a result of a number of factors created by the coronavirus pandemic. As more of daily life moved online, consumer electronics manufacturers saw an increase in demand for products like laptops. Production of chips also slowed down in part because of the pandemic, and former President Trump’s trade war with China made it more difficult for US companies to work with Chinese chip producers.
This resulted in companies like Apple, AMD, Sony, and Qualcomm raising concern over shortages over the last few weeks, including parts for iPhones and consoles like the PlayStation 5.
“Semiconductors play a critical role in enabling the products and services that fuel our economy”
Earlier this month, lobbying groups for the auto, telecommunications, and technology industries called on the White House to work with Congress to provide additional funding for domestic chip research and production.
“Semiconductors play a critical role in enabling the products and services that fuel our economy, contribute to American innovation, and enhance our national security,” the groups said in a letter to Biden last week. “Given the central role of semiconductors, strengthening the US position in semiconductor research, design, and manufacturing is a national priority.”
In a press conference Wednesday, Senate Majority Leader Chuck Schumer (D-NY) said that Congress would be working to draft a legislative package to “outcompete China and create new American jobs” as well as making new investments in the US semiconductor industry. Schumer said he’s looking to bring these items up for a floor vote in the Senate this spring.
“Right now, semiconductor manufacturing is a dangerous weak spot in our economy and in our national security, that has to change,” Schumer said on Wednesday. “We cannot let China get ahead of us in chip production.”
Outside of the semiconductor supply chain, Biden’s order also calls for similar reviews into the defense, public health, biological preparedness, information communications technology, transportation, and energy and food production sectors, the administration officials said.
Update February 24th, 4:50PM ET: This article has been updated to reflect that President Biden has signed the executive order.