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Biden to Address Chip Shortages, Semiconductor Supply Chains

Silicon wafer
(Image credit: TSMC)

Update: Clarified specifics pertaining to the industry letter.

If you’re still disappointed at not being able to buy a Ryzen 5000 series chip yet, you’ve apparently got some friends in high places. President Biden is just as annoyed as you, according to a new statement from White House Press Secretary Jen Psaki, and is working to bring the global semiconductor shortage to an end as quickly as possible.

The Biden administration is "currently identifying potential chokepoints in the [semiconductor] supply chain and actively working alongside key stakeholders in industry and with our trading partners to do more now," Psaki said.

Alongside these discussions, Psaki said that Biden also plans to sign an executive order in the coming weeks that would direct a comprehensive review of supply chain issues for critical goods, including chips. 

Two people familiar with the review's specifics told Bloomberg that it will last 100 days and will be led by the National Economic Council and National Security Council. Plans are to focus on semiconductor manufacturing and advanced packaging, as well as critical minerals, medical supplies and high-capacity batteries such as those used in electric vehicles.

The American auto industry also stands to gain from a more available supply of chips as well, with the United Auto Workers union releasing its own statement saying that "we also call on the Biden administration and Congress to develop trade and policy solutions that ensure that advanced technology that has been offshored is brought back and produced by UAW workers here in the U.S." The statement follows a January 19th letter the union sent to the Biden administration asking the President to "consider urging major silicon wafer foundries to ramp up production of automotive-grade wafers."

As such, we can't say how much of a role consumer electronics will play in Biden's plans.

National security is also a concern, especially given increased trading tensions between the United States and China within the past year. While TSMC is based in Taiwan, the political situation between Taiwan and China is still fraught.

Other moves are also developing in the semiconductor industry, with a letter sent to the President earlier today that was signed by the CEOs of Intel, AMD, and Qualcomm and which urged his administration to increase government support for domestic chip production, long a challenging issue due to foreign subsidies for chip R&D and manufacturing plants. This is in itself enlightening, given that both AMD and Qualcomm currently rely on foreign partners for chip production. “Our technology leadership is at risk in the race for preeminence in the technologies of the future, including artificial intelligence, 5G/6G, and quantum computing,” the letter states.

18 other CEOs signed the letter, which pointed out that the United States’ share of chip manufacturing has fallen by 12% since 1990. The letter’s specific demands include “substantial funding for incentives for semiconductor manufacturing, in the form of grants and/or tax credits.”

While it sounds like much of the lobbying pressure facing the Biden administration is focused on bringing chip production under American companies' purview, it's also possible that the President's solutions may also piggyback off the previous administration's work with TSMC to build a factory in Arizona.

Michelle Ehrhardt

Michelle Ehrhardt is an editor at Tom's Hardware. She's been following tech since her family got a Gateway running Windows 95, and is now on her third custom-built system. Her work has been published in publications like Paste, The Atlantic, and Kill Screen, just to name a few. She also holds a master's degree in game design from NYU.

  • NightHawkRMX
    Interesting
    Reply
  • NightHawkRMX
    I think any government influenced chip fab is is a bad idea.

    I think the reason is self explanatory
    Reply
  • Giroro
    Well we don't have the money to build government sponsored fabs, and we can't print enough money to undercut Chinese subsidies... So good luck to the administration at coming up with a way to uproot a multitrillion dollar supply chain that's dominated by a dictatorship which very much intends to keep it. They need to come up with something a lot better than the "Give up and write a speech that American manufacturing is gone forever" strategy or the "Tarriffs definitely are paid by the foreign governments themselves, and not passed on to customers" strategy.
    Reply
  • danlw
    I'm from the government! I'm here to help!
    Reply
  • Mandark
    The government should STFU and stay the F out of business affairs.
    Reply
  • ginthegit
    I am both not American and also not a Biden fan (or a Trump fan, for that matter), so lets clear that up first.

    Personally I think this is one of the better moves from Biden to make a discovery on why the Silicon Industry is suffering a bottle neck. I think a government protecting its constituents from ultra high pricing is a good thing, and one of the more valid reasons for having a government; to protect you.

    However it will get nowhere! Why because these shortages are usually artificial, but not always, due to the industry knowing there is high demand of Electronics in a lockdown, and thus garner more profit per product.

    The Rarety price fluctuations of the stock markets are one of the Principle problems with the western capitalism, and I am sorry, because Trump is more a part of that than Biden is, making Trump a hero of the right, but also a hero of Rarety based capitalism too, which is half of the problem in itself.

    Rarety based capitalist structures of the USA and the EEC (EU), have controlled prices and allowed Cartels in Oil, Electronics and Chemicals to Florish, and using the stock markets, to pretend valid reasons for shortages and screw the consumer in the process (while paying its own CEOs massive salaries). Thanks too Ultra Capitalists like Trump, the Economy and GDP is not based on the health of Consumers and the constituents in a finacial way, but that of the stock market and the large corporations (along with House pricing bubbles),

    In the mouth of Trump, " ITS ALL FAKE!" He is fake, Biden is fake, and though on the outwards they seem different, they are the same with screwing over people. Trump seems the lesser of the evils, as he believes in conservatism, but he has also thrown more power to the corporations... and it was Trump that signed the Vaccination Mandates that are basically allowing the Phama industry to SCREW YOU UP! HE DID IT! Biden hates that fact, not that he can't take credit for it; more because he can't get his nice Bribe or Special Returns that Trump will. It's all very 1984 with Trump as Big brothers Little brother.

    But back to the point, All Biden will find out, is that the supply chain is a fake Bottle neck, he'll get a fat check to then slow the discovery down, and this problem will continue until the Silicon industry decides to end it, and He will take the Credit.

    On the otherhand, the Ruthless Persuit of Moores law, and the Tik Tok cycle also demands Intel and AMD need to overcome the Quantum problems that come with the Shrinking of Transistor sizes . They have found solutions in the RARE EARTH MATERIALS that are abundant in Russia and China, so Biden will not be able to Coax Russia because the Mines are all private, so he cosied up with China (as we all know).
    If China refuse to sell the Rare earth matrials over a quota (which they decided to do a few years back), Bidens discovery will be quick and fruitless unless he scratches their back (which will happen).

    Politics is a dirty game; All the politicians and Business men are corrupt, and that includes both Trump and Biden.
    Reply
  • digitalgriffin
    Anybody who knows my previous post knows how much I want the US off China's teet. It's a national security thing. And when China steamrolls taiwan in the next couple years, TSMC is a hostage point against us. China's ambitions are clear with jailing of opposition and burnings of free press.

    I would practically pay for a new fab to be built here in the USA on the condition 1) we get to say when it shuts down and 2) it gets upgraded to newest nodes when available. (Also paid for by us) and they keep profits unless China is hostile and takes over taiwan.
    Reply
  • gdmaclew
    ginthegit said:
    I am both not American and also not a Biden fan (or a Trump fan, for that matter), so lets clear that up first.

    Personally I think this is one of the better moves from Biden to make a discovery on why the Silicon Industry is suffering a bottle neck. I think a government protecting its constituents from ultra high pricing is a good thing, and one of the more valid reasons for having a government; to protect you.

    However it will get nowhere! Why because these shortages are usually artificial, but not always, due to the industry knowing there is high demand of Electronics in a lockdown, and thus garner more profit per product.

    The Rarety price fluctuations of the stock markets are one of the Principle problems with the western capitalism, and I am sorry, because Trump is more a part of that than Biden is, making Trump a hero of the right, but also a hero of Rarety based capitalism too, which is half of the problem in itself.

    Rarety based capitalist structures of the USA and the EEC (EU), have controlled prices and allowed Cartels in Oil, Electronics and Chemicals to Florish, and using the stock markets, to pretend valid reasons for shortages and screw the consumer in the process (while paying its own CEOs massive salaries). Thanks too Ultra Capitalists like Trump, the Economy and GDP is not based on the health of Consumers and the constituents in a finacial way, but that of the stock market and the large corporations (along with House pricing bubbles),

    In the mouth of Trump, " ITS ALL FAKE!" He is fake, Biden is fake, and though on the outwards they seem different, they are the same with screwing over people. Trump seems the lesser of the evils, as he believes in conservatism, but he has also thrown more power to the corporations... and it was Trump that signed the Vaccination Mandates that are basically allowing the Phama industry to SCREW YOU UP! HE DID IT! Biden hates that fact, not that he can't take credit for it; more because he can't get his nice Bribe or Special Returns that Trump will. It's all very 1984 with Trump as Big brothers Little brother.

    But back to the point, All Biden will find out, is that the supply chain is a fake Bottle neck, he'll get a fat check to then slow the discovery down, and this problem will continue until the Silicon industry decides to end it, and He will take the Credit.

    On the otherhand, the Ruthless Persuit of Moores law, and the Tik Tok cycle also demands Intel and AMD need to overcome the Quantum problems that come with the Shrinking of Transistor sizes . They have found solutions in the RARE EARTH MATERIALS that are abundant in Russia and China, so Biden will not be able to Coax Russia because the Mines are all private, so he cosied up with China (as we all know).
    If China refuse to sell the Rare earth matrials over a quota (which they decided to do a few years back), Bidens discovery will be quick and fruitless unless he scratches their back (which will happen).

    Politics is a dirty game; All the politicians and Business men are corrupt, and that includes both Trump and Biden.

    Canada has one of the largest supplies of Rare Earths in the world. Now all we need to do is develop them.
    Reply
  • drinking12many
    gdmaclew said:
    Canada has one of the largest supplies of Rare Earths in the world. Now all we need to do is develop them.
    A few years back a company in the US name Molycorp reopened a rare earth mine in CA and spent billions to meet environmental regulations to re-open it... then china dumped minerals on the market they couldn't compete and went bankrupt. That was one of the dumbest things the US ever did from a strategic supply perspective. The US has done nothing to help many industries which should be considered vital to national defense in the supplier side of the market and its been an absolutely stupid action. Another company did buy the mine after bankruptcy but last I saw they still had to send the minerals to china to be processed....dumb.
    Reply
  • Mandark
    I agree with the above statements regarding politics as being a giant farce. In reality they are all on the same side and against their constituents. It’s a big crap show to keep us busy and dancing like monkeys whenever they play a tune.

    They are nothing more than puppets put up there by the 1% that control everything. Politicians have no wish to do good all they want to do is increase their own personal gain and they are in bed with the corporations. Our media is owned buy that one percent that control everything as well so you can’t trust anything they say. Basically everything that you read on the news is a lie. I hate to break it to people here but there is no such thing as free press either it’s all owned by the ruling scum

    The only people that are drawn towards politics are pure scum
    Reply