White House Takes On Silicon Shortage, Identifies Choke Points

The White House has said that its top economic and national security officials have ramped up efforts to help the American car industry tackle the growing shortage of silicon chips.

Reuters quoted a White House spokeswoman as saying on Wednesday that the Biden administration has held meetings with automotive companies and suppliers to identify chokepoints and urged companies to work cooperatively to tackle the shortage.

Earlier this week, German car maker VW publicly blamed poor planning by chip makers as the principle reason for most car brands around the world have had to to reduce factory production.

US action

At the weekend,the US administration of Joe Biden said it is looking to take immediate action to address a global shortage of semiconductors that has forced US carmakers to temporarily slow or stop production.

The White House has now said it has also tasked US embassies with identifying how foreign countries and companies that produce chips can help resolve the global shortage and working with international partners and allies, urging them to deal with the current shortfall.

The effort includes outreach to Taiwan, home of the world’s largest contract chip maker Taiwan Semiconductor Manufacturing Co Ltd (TSMC), to find ways to resolve the shortage.

That comes after US chip firms reportedly called for government help in setting up chip production factories in the United States.

Most of the world’s chips are currently made in Asia.

And in a 17 February letter, Biden’s top economic adviser, Brian Deese, thanked Taiwan’s Economic Affairs Minister Wang Mei-hua for working to help to resolve the shortage in coordination with the island’s manufacturers.

Wang Mei-hua met with executives of major Taiwanese chipmakers last month, after Germany’s Economy Minister Peter Altmaier wrote to Wang to ask her for help in addressing the shortage.

Wang also confirmed at the time the United States, European Union and Japan had also been in contact.

And the silicon shortage issue was also addressed during Taiwan’s most senior meeting with US President Joe Biden’s administration, namely with US Deputy Assistant Secretary for Trade Policy and Negotiations Matt Murray.

The White House spokeswoman this week said officials recognize steps must be taken to avoid future shortages, which is why the administration is launching a comprehensive review of critical supply chains to identify vulnerabilities and take steps like spurring increased US domestic production.

Car manufacturers

There is a wide range of car makers experiencing difficulties sourcing the computer chips needed to make modern cars.

Daimler (which makes Mercedes), Fiat, Honda, Ford, Nissan, Subaru and Toyota all reportedly have had to suspend production for days or weeks at a time.

Audi (part of the Volkswagen group) also confirmed it was having to slow production because of the computer-chip shortage, forcing it to make 10,000 fewer cars in the first quarter of the year and putting more than 10,000 workers on furlough.

Earlier this month Mazda warned it would cut its global output by 7,000 vehicles in February and March.

Last week General Motors confirmed it was extending its production cuts at three North American factories.

Samsung also recently warned that a global shortage in semiconductors for cars could have a knock-on effect on the memory chips used in smartphones.

Ford warned this month the chip shortage could lead to a 10 to 20 percent loss in first-quarter production.