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

Stock MarketsApr 12, 2021 01:05PM ET
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© Reuters. FILE PHOTO: U.S. President Biden signs an executive order on the economy at the White House in Washington

By Nandita Bose

WASHINGTON (Reuters) - U.S. President Joe Biden will urge Congress to invest $50 billion in semiconductor manufacturing and research when he meets with top executives from nearly 20 major companies on Monday about the global chips shortage that has roiled the automotive industry and technology firms.

The push is part of his broader focus on rebuilding U.S. manufacturing as a powerhouse for the world's largest economy - and a source of good-paying jobs - after years of declining investments and productivity growth, a senior administration official said.

White House spokeswoman Jen Psaki told reporters that no immediate decision or announcement was likely to come from the meeting.

“One of the reasons the president is stopping by this meeting ... is to hear directly from companies about the impacts, what would help the most through this period of time," she said.

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.

Biden is expected to stop by the meeting to push his $2 trillion infrastructure plan, which includes $300 billion aimed at expanding manufacturing, especially in disadvantaged areas and communities of color through loans, grants, investments and the targeted use of federal procurements.

While the proposed investments will take time to implement, the administration is also seeking "short-term and medium-term solutions that will be discussed during the summit," the official said. No further details were immediately available.

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

The "summit reflects the urgent need to strengthen critical supply chains," Deese said in a statement.

Commerce Secretary Gina Raimondo will also take part, as well as executives from GlobalFoundries, PACCAR Inc (NASDAQ:PCAR), NXP (NASDAQ:NXPI) and Taiwan Semiconductor Manufacturing Co, AT&T (NYSE:T), Samsung Electronics (OTC:SSNLF) Co, Google-parent Alphabet (NASDAQ:GOOGL) Inc, Dell Technologies (NYSE:DELL), Intel Corp (NASDAQ:INTC), Medtronic (NYSE:MDT), Northrop Grumman (NYSE:NOC), Hewlett Packard Enterprises, Cummins (NYSE:CMI) and Micron Technology (NASDAQ:MU).

A U.S. auto industry group last 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 their plants were idled by the coronavirus pandemic.

When they were ready to resume production, they found 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," according to an industry group.

"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," the group said last week.

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.

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

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Comments (7)
Catholic Man
CatholicMan Apr 14, 2021 3:45PM ET
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I'm glad Trump took action on this a year ago, or we would be in a worse shape.
Mark Manley
Mark Manley Apr 14, 2021 9:28AM ET
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I'm sure Biden thinks we're taking about potato chips, c'mon man make more chips, I'm hungry
President Xi Jinping
President Xi Jinping Apr 13, 2021 10:40AM ET
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These chips are used in all military hardware. Its a matter of national security. The end.
James Moriarty
James Moriarty Apr 12, 2021 4:45PM ET
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This is all thanks to crypto miners. Once they "solve" this, prices will go down for them, and we'll see a repeat of the same thing, only this time with a massive spike in mining activity. Do with that information what you will, everyone. Get them tendies.
Roger Miller
Roger Miller Apr 12, 2021 4:04PM ET
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A prime example of government central planning picking the winners. They take more through taxes then decide who gets some back. No company that benefits directly from big government spending will complain about higher taxes. Better off reducing taxes for all.
Dave Jones
Dave Jones Apr 12, 2021 3:01PM ET
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LMAO
milena villa escobar
milena villa escobar Apr 12, 2021 1:15PM ET
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Yeah like Biden is going to be able to handle negotiations regarding computer chips. He can't find his way to the bathroom.  He should be in charge of finding out about the computer chips in his son's laptop.  The one he suddenly never owned now that it's been found
Tre Hsi
Tre Hsi Apr 12, 2021 1:15PM ET
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so what was Trump's excuse for no doing anything about the shortage despite the fact that for months he knew this was going to happen?
Catholic Man
CatholicMan Apr 12, 2021 1:15PM ET
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Tre Hsi  President Trump started taking action on this a year ago. You can thank him we're not in a worse position.
 
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