US administration pledges to tackle processor shortages in critical supply chains

The new Biden administration has promised to take “aggressive steps” to tackle the global shortage of processors powering modern technologies.

On Thursday, White House Press Secretary Jen said the administration is working with business and trade partners to manage shortages, Bloomberg reports.

In particular, the US government is trying to identify the worst choke points in supply chains to create a “strategy” to prevent future bottlenecks caused by problems in the semiconductor industry.

President Biden is expected to sign an executive order leading to a 100-day formal review of chip shortages as part of a wider investigation into supply chains for “critical goods.”

The review will be led by the US National Economic Council and National Security Council, according to the publication. A draft of the order suggests an analysis of supply chains involving processors, medical supplies, packaging, and batteries used in products including electric vehicles.

The shortage of semiconductors is hurting the domestic production of goods, with automakers severely feeling the impact.

This month, General Motors said it would temporarily close down all three of its North American plans due to shortages. Ford, too, recently warned investors that shortage-related production slowdowns could impact its bottom line.

Processors are used in everything from smart cars to cryptocurrency mining rigs and gaming consoles. There has been a shortage for years of some chip designs, but the disruption caused by COVID-19 at production plants has further exacerbated the problem.

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On Thursday, major semiconductor giants penned a letter to President Biden requesting incentives to bring chip production back to the United States.

In the letter, vendors including Intel, Qualcomm, and AMD requested “substantial funding” and “subsidies” to entice manufacturers to come to the US rather than look to countries such as South Korea and Taiwan.