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White House Convenes Summit To Address Supply Shortage Crippling Auto Plants

By: Scott Detrow | Franco Ordoñez | NPR
Posted on: Monday, April 12, 2021

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WASHINGTON, D.C. (NPR) — President Biden’s top national security and economic advisers are trying to address a critical supply crunch that is slowing U.S. automobile manufacturing and threatens other sectors, including national security, according to experts.

National security adviser Jake Sullivan, National Economic Council Director Brian Deese and Commerce Secretary Gina Raimondo will meet Monday with executives from 19 companies to discuss the growing shortage of semiconductors, a key component of many computerized electronics.

The shortage touches nearly every industry, but U.S. automakers have been especially hit hard. General Motors, Ford and Stellantis (formed by a merger involving Fiat Chrysler) have all temporarily closed down auto plants as the companies wait for more supplies of the parts needed for increasingly computerized cars.

The White House summit, which will be conducted virtually, will include those three companies as well as computer companies such as Dell and HP; AT&T; Alphabet, the parent company of Google; and defense contractor Northrop Grumman, among others. Biden plans to attend briefly.

The president had already ordered a review addressing what the federal government can do to move more semiconductor manufacturing to the United States and to make existing supply lines more resilient. Biden also held a bipartisan meeting in February where he discussed the agreement among both Republicans and Democrats that the semiconductor shortage needed to be addressed.

“It’s a great opportunity for us to talk about long-term solutions to fix this problem,” said John Neuffer, chief executive officer of the Semiconductor Industry Association.

“In 1990, [the U.S.] manufactured about 37% of the world’s semiconductors. Now we only manufacture 12%,” Neuffer said. “That is a supply chain vulnerability that has come into bold relief over the past year.”

Demand for new cars has spiked from low interest rates and pent-up demand during the pandemic, and that has exacerbated the problem for carmakers. But Daleep Singh, a deputy national security adviser and deputy director of the National Economic Council, told NPR that the Biden administration sees the shortage as a much broader national security problem.

“Semiconductors are critical for most of the emerging technologies you could list,” he said. “They’re civilian and military in their purpose. Pharmaceuticals, space, but also weapons systems and their satellites. So here’s the problem: Today 100% — all of the most advanced semiconductors are produced in East Asia, and more than 90% by one company. That’s a critical vulnerability.”

Biden’s $2 trillion infrastructure plan includes $50 billion to create a new office within the Commerce Department to coordinate domestic semiconductor manufacturing. Biden has also urged Congress to spend the same amount of money to speed up that transition.