U.S. President Joe Biden signed an executive order on Wednesday that will start an investigation into critical shortages of various necessary goods in the U.S. This includes the global semiconductor shortage, which has dramatically affected the manufacturing for electronic goods such as smartphones, video cards, laptops, and new cars.
The Executive Order on America’s Supply Chains directs the Departments of Commerce, Energy, Defense, and Health to conduct a 100-day review of supply chain risks, and for the secretary of each department to present policy recommendations that will address those risks.
“The American people should never face shortages in the goods and services they rely on,” Biden said.
The low global supply of semiconductors is also one of the reasons why next-generation video game consoles, such as the PlayStation 5 and Xbox Series X|S, have been so hard to find for the last three months. (This is probably not what’s motivating Biden’s executive order. Dude’s a Mario Kart fan.)
The shortage, which has caused manufacturing bottlenecks throughout the world, has several root causes. One of the side effects of the COVID-19 pandemic was a heightened worldwide demand for consumer electronics, first due to work-from-home orders, and then to quarantine-induced boredom. People needed new computers for their home offices, and then they needed something to do instead of going out.
That put additional stress on chip manufacturers in places such as Taiwan and South Korea, which were already working as hard as they could. There was no way for factories to increase supply to meet demand, particularly once lockdown measures forced some of them to temporarily shut down. Add that to other issues, such as effects from Donald Trump’s 2019 tariffs on China, and it’s proven to be a recipe for disaster.
Wednesday’s executive order follows up on news from Feb. 11, where White House Press Secretary Jen Psaki told reporters that the Biden administration planned to take steps to address the semiconductor shortage, including today’s mandated probe into governmental supply chains.
On the same day, the Semiconductor Industry Association (SIA) sent an open letter to President Biden, noting that the U.S. share of global semiconductor manufacturing has steadily declined over the last 30 years from 37% to 12%, with relatively flat U.S. investment in R&D.
The letter, co-signed by CEOs from AMD, NVIDIA, Intel, Qualcomm, and 17 other American technology companies, urges the president to address the issue by authorizing federal incentives for domestic semiconductor manufacture, research, and development.
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