White House Convenes Summit To Address Supply Shortage Crippling Auto Plants

President Biden, joined by top foreign and domestic policy advisers, met virtually with 19 CEOs Monday, as his administration tries to deal with a critical supply crunch that is slowing U.S. automobile manufacturing and threatens other sectors, including national security, according to experts.

Biden, national security adviser Jake Sullivan, National Economic Council Director Brian Deese and Commerce Secretary Gina Raimondo gathered the broad range of CEOs to discuss a growing shortage of semiconductors, a key component of many computerized electronics.

The increased demand, as well as the disruption to steady supply chains that the pandemic brought into focus over the past year, has led to a renewed push by Biden, lawmakers from both parties, and industrial leaders to build up domestic semiconductor manufacturing.

Speaking to the 19 CEOs during the portion of the meeting that was open to the press, Biden voiced support for legislation speeding up that transition, and the president highlighted aspects of his $2 trillion infrastructure plan that focus on building up U.S. semiconductor manufacturing.

Biden also used the meeting to try to build support for the broader proposal. "These chips, these wafers — batteries, broadband — it's all infrastructure. This is infrastructure," Biden said. Many congressional Republicans have criticized the administration's proposal as too broad and only loosely tied to traditional infrastructure proposals like rebuilding roads and bridges.

While the American Jobs Plan does not appear to have any support yet from Republican lawmakers, Biden pointed out the push for more domestic semiconductor manufacturing is bipartisan.

"This is an issue that has broad support in the United States Congress," Biden said.

The semiconductor 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 included 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.

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.

Industry leaders have welcomed the White House attention. "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."

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