White House to zero in on chip shortage in meeting with company officials

Joe Biden holding a semiconducter chip (PHOTO: Reuters)

Senior White House officials will meet on Monday with top executives from nearly 20 major companies to discuss a global semiconductor shortage that has roiled the automotive industry and technology firms.

The White House meeting is billed as the “CEO Summit on Semiconductor and Supply Chain Resilience” and will include White House national security adviser Jake Sullivan and National Economic Council Director Brian Deese.

As of midday Friday, 19 major companies had agreed to send executives, including General Motors Chief Executive Mary Barra, Ford Motor Chief Executive Jim Farley and Chrysler-parent Stellantis NV CEO Carlos Tavares.

Deese said in a statement the “summit reflects the urgent need to strengthen critical supply chains.”

Commerce Secretary Gina Raimondo will also take part, as well as executives from GlobalFoundries, PACCAR, NXP and Taiwan Semiconductor Manufacturing Company, AT&T, Samsung, Google-parent Alphabet, Dell Technologies, Intel Corp, Medtronic, Northrop Grumman, HP, Cummins and Micron.

A U.S. auto industry group this week urged the government to help and warned that a global semiconductor shortage could result in 1.28 million fewer vehicles built this year and disrupt production for another six months.

Over the weekend, GM canceled more truck production shifts at two U.S. plants.

“Trying to address supply chains on a crisis-by-crisis basis creates critical national security vulnerabilities,” Sullivan said in a statement.

Automakers have been hit particularly hard by the global chip shortage after many canceled orders when auto plants were idled during the coronavirus pandemic.

When they were ready to recommence production, they found that chipmakers were busy fulfilling orders for the consumer electronics industry which has seen demand for premium devices - both for work and leisure - boom as people spent more time at home.

Broadband internet, cellphone and cable TV companies also face delays in receiving “network switches, routers, and servers... Shortages in semiconductors and the associated delays will result in hundreds of millions of dollars in impact to the broadband and cable television industry this year,” an industry group said this week.

President Joe Biden wants at least $100 billion to boost U.S. semiconductor production and fund investments to support production of critical goods, but officials said this funding will not address short-term chip needs.

Later this week the Senate Commerce Committee will hold its first hearing on a bipartisan measure to bolster technology research and development efforts in a bid to address Chinese competition.