Biden: US should lead the world in computer chips

Tells execs that companies need to invest to stay ahead of global competition

WASHINGTON — President Joe Biden used a virtual meeting with corporate leaders about a global shortage of semiconductors to push Monday for his $2.3 trillion infrastructure plan, telling them that the U.S. should be the world’s computer chip leader.

“We need to build the infrastructure of today, not repair the one of yesterday,” he told the group of 19 executives from the technology, chip and automotive industries. “China and the rest of the world is not waiting and there’s no reason why Americans should wait.”

He said the country hasn’t made big investments to stay ahead of global competitors, and it needs to step up its game.

Biden made an appearance at the meeting between administration officials and company leaders held to discuss developing a stronger U.S. computer chip supply chain. The meeting came as the global chip shortage continued to plague a wide array of industries.

CEOs of AT&T, Dell, Ford, General Motors, Stellantis (formerly Fiat Chrysler), Intel, Northrop Grumman, and others were scheduled to attend.

But industry experts say there’s little they can do to stem the shortage, which has delayed a new iPhone and forced automakers to temporarily shut factories.

Instead, Biden brought up developing a U.S. chip supply chain since most are made in Asia and shipped to the U.S. In February he ordered a review of the supply chain and pledged to work with international partners to ensure stable supplies.

Wedbush analyst Daniel Ives said there’s little that can be done immediately to end the current problem.

“This could change things over the next three to five years, but for right now, there’s no structural changes that could alleviate the shortage,” he said.

Things have worsened in recent weeks, particularly in the auto industry, where factories are shutting down because there aren’t enough chips to finish building vehicles that are becoming rolling computers.

The coronavirus pandemic touched off a cascade of events that led to the problems. Chip factories had to shut down early last year, particularly overseas where most processors are made. By the time they reopened, they had a backlog that was worsened by unforeseen demand.

High demand for consumer electronics squeezed the auto industry. Chip makers compounded the pressure by rejiggering factory lines to better serve the consumer electronics market, which generates far more revenue for them than autos.

After eight weeks of pandemic-induced shutdown in the spring, automakers started reopening factories earlier than expected. But they found that chip makers weren’t able to flip a switch quickly and make the more robust processors needed for cars. Industry executives say the shortage should start to end by the third quarter of this year.

The U.S. has only 12% of the world’s semiconductor factory capacity, down from 37% in 1990, according to the Semiconductor Industry Association.