The White House held a classified briefing with some US lawmakers on the dire risks to the US economy from semiconductor supply chain issues, as it pushes Congress for $52 billion in funding to subsidize production.
The White House held a classified briefing on Wednesday with some US lawmakers on the dire risks to the US economy from semiconductor supply chain issues, as it pushes for $52 billion in funding to Congress to subsidize production.
“The best estimate is a lack of available semiconductors that probably took up a full percentage point of GDP in 2021,” Brian Deez, director of the White House National Economic Council, told reporters.
The briefing included Commerce Secretary Gina Raimondo, Deputy Defense Secretary Kathleen Hicks, National Security Adviser Jake Sullivan, “to discuss the urgent need to invest in US-made semiconductors as well as research and development that will help our economic and national security.” will protect.” The White House said.
Persistent industry-wide shortages of chips have disrupted production in the automotive and electronics industries, forcing some firms to reduce production. There is a growing demand for semiconductors to reduce dependence on other countries.
“A significant interruption in our supply of semiconductors could do a historic loss to the US economy – a loss far greater than the impact of the chips shortage on the US auto industry right now – and would reduce our technological competitiveness and military advantage over opponents globally, The White House said.
The White House is pushing Congress to approve US subsidies to manufacture semiconductor chips after months of discussions.
The Senate first passed $52 billion in chips funding in June, authorizing $190 billion to bolster US technology and research to compete with China, while the House of Representatives passed its version in early February. Passed it. Deez said he expects both the Senate and House to appoint negotiators this week to “soon” begin the formal process for finalizing a settlement bill.
“The risk is profound,” Deez said, adding that the US economy will face severe disruption. Deez cited “economic moves by major competitors — particularly around growing vulnerabilities from the China semiconductor issue.”
A Commerce Department analysis prepared for the briefing seen by Reuters said semiconductor fabs take years to build.
“There is no quick solution in the event of an emergency,” it said, adding that private sector investment in US chips production is not sufficient and “will not be sufficient to mitigate the risks associated with current US supply chain vulnerabilities.”
The bills take different approaches to addressing US competition with China on various issues, as well as trade and some climate provisions.
The Biden administration noted that the United States produced about 40% of all chips in 1990, compared to only 12% of global production today.
(Reporting by David Shepardson; Editing by Sandra Maler, Bernard Orr)
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