President Joe Biden signed an executive order Wednesday meant to address a global chip shortage impacting industries ranging from medical supplies to electrical autos.
The order consists of a 100-day review of key merchandise together with semiconductors and advanced batteries frail in electrical autos, adopted by a broader, prolonged-length of time review of six sectors of the economy. The prolonged-length of time review will allow for policy recommendations to strengthen supply chains, with the goal of posthaste imposing the strategies, Biden said at a press tournament Wednesday sooner than he signed the order.
The action follows calls from bipartisan individuals of Congress and industry leaders warning about the potential consequences of the shortage. Regularly identified as chips, semiconductors are frail to vitality electronics together with phones, electrical autos and even some medical supplies. Senate Majority Leader Chuck Schumer, D-N.Y., said that “semiconductor manufacturing is a dangerous weak status in our economy and in our national safety.”
Biden met with a bipartisan community of lawmakers Wednesday to discuss the shortage and said it was “very productive.” He praised the cooperative nature of the meeting, saying, “or now not it is savor the venerable days, individuals actually were on the same page.”
The semiconductor supply chain had taken a hit early in the Covid pandemic since great of the realm’s chips are manufactured in places savor China and Taiwan. The health crisis has underscored concerns with U.S. reliance on supply chains abroad in many areas, and the semiconductor industry is now not any various. According to the Semiconductor Industry Association, a coalition backed by several chipmakers, the U.S. greatest accounts for about 12.5% of semiconductor manufacturing.
The shortage has already impacted several companies. Ford said earlier this month that diminished estimates from suppliers may mean losing up to a 20% of its anticipated first-quarter production. General Motors said earlier this month that it would prolong downtime at several production plants due to the shortage and would “reassess in mid-March.” On Wednesday, ahead of the executive order announcement, then again, GM CFO Paul Jacobson said the worst of the chip shortage may actually be over already.
In a letter to Biden last week, several industry associations together with SIA, the Advanced Medical Technology Association and the Motor & Gear Manufacturers Association wrote that the U.S. will have to tranquil incentivize unique semiconductor manufacturing plants to be established in the country to compete successfully with other nations that have invested in chip production.