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The Biden administration has pledged to take immediate action to address a global shortage of semiconductors that has forced the shutdown of several US auto factories.
Jen Psaki, White House press secretary, said the government “identified potential bottlenecks in the supply chain” after coming under pressure from lawmakers, semiconductor companies and car manufacturers over the shortages.
A surge in demand for consumer electronics during the pandemic has led to the chip shortage, exacerbated in the US by sanctions against SMIC, the Chinese chip maker.
It has paralyzed automakers around the world as chip makers shift the needs of consumer electronics customers, who pay more for semiconductors.
A White House official said the government was “actively talking” with auto companies, semiconductor groups and foreign diplomats to address the issue.
President Joe Biden will sign an executive order in the coming weeks calling for “a comprehensive overhaul of critical goods supply chains,” Psaki said.
She added, “The review will aim to identify the immediate actions we can take, from improving the physical production of those items in the US to working with allies to develop a coordinated response to the weaknesses and bottlenecks hurting American workers. “
General Motors and Ford have shut down factories in response to chip shortages. GM plants in Kansas, Canada and Mexico will cease vehicle production until mid-March, while Ford said it would be working fewer shifts this week at two plants producing the best-selling F-150 pickup truck.
Both companies are predicting substantial blows to their cash flow and earnings this year due to the deficit. GM said the deficit could cut up to $ 2 billion in pre-interest and tax revenues; Ford said revenues could drop to $ 2.5 billion.
The automakers said they were working with suppliers to address the shortage and tried to allocate chips to more profitable vehicles whenever possible.
Its impact on the auto industry has caught the attention of US lawmakers. Last week, 15 senators, including Chuck Schumer, the leader of the Senate majority, urged the White House to take action against the deficit, which they say threatened the US’s “post-pandemic economic recovery.”
Senators recommended that the White House obtain funding approved by Congress last year in the CHIPS bill to boost domestic semiconductor manufacturing.
The crisis facing automakers has also fueled calls for semiconductor manufacturing to go to the US for reasons of national security.
On Thursday, chief executives of major semiconductor industry companies wrote to Biden demanding that funding for domestic semiconductor manufacturing be included in his infrastructure recovery plan.
The letter, signed by chief executives from Intel, Qualcomm and GlobalFoundries, among others, pointed to the declining US share of global chip production over the past three decades. Without further support, the letter warned, “the country’s technological leadership is at risk.”
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