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.
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