Biden looking at solutions for chip shortages

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The Biden administration is looking at ways to solve the increasingly severe shortage of semiconductors. The US government is looking at both short-term and long-term solutions.

In the short term, the focus is on bottlenecks in the chip supply chain, White House spokesperson Jen Psaki told Bloomberg. In the longer term, policymakers are looking at ways to solve inherent problems that chip manufacturers have been facing for years.

Joe Biden is expected to sign an order launching a 100-day investigation. The National Economic Council and the National Security Council will look at semiconductor manufacturing, critical minerals, medical supplies and large batteries like those in electric cars.

Letter from chip companies

A coalition of 21 companies sent a letter to the US President urging strong support for domestic semiconductor manufacturing. The letter was signed by the CEOs of Intel, Qualcomm and AMD, among others.

The companies fear that the United States will fall behind in the production of microchips. They point out how in 1990 the US was still responsible for 37 percent of chip production, whereas today this has dropped to only 12 percent.

In fact, chip designers can only turn to Taiwanese TSMC and South Korean Samsung for the production of their latest microchips. These companies are moving more and more of their production capacities to China. However, tensions between the US and China could lead to chip shortages.

Chip shortages

And there certainly are chip shortages. Both TSMC and Samsung are struggling to keep up with the current demand for semiconductors and car manufacturers are also complaining that they cannot get the necessary parts for their cars. Some car manufacturers even feel compelled to temporarily shut down production lines because they simply cannot get the parts they need to finish their cars.

Tip: Samsung: chip shortages for cars may hit smartphones as well