U.S. Seeks Sharing of Chip Supply Information to Ease Crunch
(Bloomberg) -- Commerce Secretary Gina Raimondo said the Biden administration is exploring how to help semiconductor producers and buyers share supply chain information to alleviate the global chip supply crisis, and urged Congress to swiftly pass legislation to fund domestic production.
“There’s a lack of transparency right now in the supply chain,” Raimondo said in a call with reporters Thursday following a day of meetings with companies. “We are trying to figure out what role the government can and should play in increasing that information sharing and forecasting so we can alleviate the short-term crunch.”
Raimondo convened executives from the biggest chipmakers, automakers and technology giants as a global semiconductor shortage weighs on those industries. The summit drew so much interest that it had to be split into two separate sessions, people familiar with the planning said.
Among the attendees were executives from companies including Apple Inc., Alphabet Inc.’s Google, Ford Motor Co., General Motors Co., AT&T Inc., Cisco Systems Inc., Verizon Communications Inc., Samsung Electronics Co., Qualcomm Inc., General Electric Co., GlobalFoundries Inc. and Taiwan Semiconductor Manufacturing Co.
Raimondo said using the Defense Production Act, a wartime power to set priorities for certain supplies, would be “a challenge” because of the impact on a wide range of sectors.
On Monday, Raimondo will tour a Micron Technology Inc. plant in Manassas, Virginia, and is to meet with the company’s chief executive officer, Sanjay Mehrotra. She’ll be joined by Senators Mark Warner, Virginia Democrat, and John Cornyn, a Texas Republican, two key lawmakers in the debate over chips funding and American competitiveness.
“This meeting was not about how do we fix the near term cause everybody knows that’s not something you can put a magic wand over to fix,” said Thomas Caulfield, chief executive officer of GlobalFoundries, who attended the meeting, in an interview with Bloomberg News. “But let’s go do the things today that will fix this strategically, cause that’s the only thing we can do with industrial policies and governments getting involved. Everybody absolutely agreed to that.”
The meeting served as follow-up to a White House gathering last month that was attended by President Joe Biden. Administration officials have conceded that there’s not much that can be done in the short-term to address the shortage and that the focus is on a long-term strategy to avoid future shortfalls.
Raimondo and the executives discussed how the current semiconductor shortage is affecting industries; how to improve transparency in the supply chain for users of the chips; and how to use the proposed funding for semiconductor research and development to prevent shortages in the future, the people said.
Participants said they saw the meeting mainly as an opportunity to communicate their concerns to the highest level in the U.S. government.
Semiconductor manufacturers have pushed the U.S. to create incentives through grants and tax credits to help spur production in America.
Congress is debating legislation to fund semiconductor research and development and may include it in a broader China bill in the coming months. Biden has endorsed the legislation but is leaving the negotiations to lawmakers.
As part of that proposal, automakers have demanded that 25% of the chips produced with federal grant money be set aside for their industry. After extensive debate, lawmakers have settled on allocating roughly $2 billion for auto-grade chips.
John Bozzella, president of the Alliance for Automotive Innovation, a trade group, said in a statement that “we welcome Commerce Secretary Raimondo’s continued commitment to addressing the microchip shortage. Our focus remains on reducing the impact and severity of this short-term crisis, while working to address long-term concerns over capacity.”
Raimondo said her team speaks to lawmakers multiple times a day to make the case for the legislation. “I can’t urge Congress strongly enough to move swiftly to pass this so that we can get to work and start alleviating the real challenges across the semiconductor supply chain,” she said.
Thursday’s meeting also comes as Biden prepares to welcome South Korean President Moon Jae-in on Friday to the White House, where the two leaders will hold a joint press briefing. The U.S. has been looking to South Korea’s advanced semiconductor industry as Washington seeks to secure supply chains in its trade battles with China.
Raimondo on Friday will hold a meeting with South Korean Minister of Trade, Industry and Energy Moon Sung-wook on supply chain issues. The meeting is also expected to include executives of South Korean chip companies.
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