By Alex Leary
WASHINGTON -- 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
"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
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
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
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
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
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
Robert Wall contributed to this article.
Write to Alex Leary at email@example.com
(END) Dow Jones Newswires
April 12, 2021 22:16 ET (02:16 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.