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The Biden government has promised to take immediate action to address a global shortage of semiconductors that has forced the closure of several U.S. car plants.
White House press secretary Jen Psaki said the administration was identifying potential supply chain shocks after they came under pressure from lawmakers, semiconductor companies and carmakers over the shortages.
A huge increase in the demand for consumer electronics during the pandemic has led to the shortage of chips, which has been exacerbated in the US by sanctions against SMIC, the Chinese chipmaker.
This has hampered carmakers worldwide as chipmakers divert supplies to consumer electronics, paying more for semiconductors.
A White House official said the government was in an “active dialogue” with auto companies, semiconductor groups and foreign diplomats to address the issue.
President Joe Biden will sign an executive order in the coming weeks demanding a comprehensive review of critical goods supply chains, Psaki said.
She added: “The review will focus on identifying the immediate steps we can take, from improving the physical production of the items in the US to collaborating with allies to a coordinated response to the weaknesses and bottlenecks to the detriment of American workers. “
General Motors and Ford have factories in diapers due to the shortage of chips. GM plants in Kansas, Canada and Mexico will halt vehicle production until mid-March, while Ford said it will perform fewer shifts this week at two plants producing its top-selling F-150 pickup truck.
Both companies predict large cash flows and earnings this year due to the deficit. GM said the deficit could bring down to $ 2 billion in earnings before interest and taxes; Ford said earnings could drop to $ 2.5 billion.
The carmakers have said they are working with suppliers to manage the shortfall, trying to allocate chips to more profitable vehicles where possible.
The impact on the automotive industry has attracted the attention of U.S. lawmakers. Last week, 15 senators, including Chuck Schumer, the leader of the Senate majority, called on the White House to act on the deficit, which they say threatens the US ‘post-pandemic economic recovery’.
The senators recommend the safe funding of the White House approved by Congress last year in the CHIPS Act to promote household semiconductor manufacturing.
The crisis facing car manufacturers has also called for the diversion of semiconductor manufacturing to the US for national safety reasons.
The general managers of large companies in the semiconductor industry wrote to Biden on Thursday to demand that funding for the production of domestic semiconductors be included in its infrastructure recovery plan.
The letter, signed by the CEOs of Intel, Qualcomm and GlobalFoundries, among others, notes the US’s declining share in global chip manufacturing over the past three decades. Without further support, the letter warned, the country’s “technology leadership is in jeopardy.”
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