The semiconductor shortage explained: The threat to US tech

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Top executives from Big Tech companies and car manufacturers will ask the Biden administration on Monday for immediate solutions to the global semiconductor shortage, which has hampered production in many U.S. industries.

Executives from tech companies such as Google, Intel, and Samsung, along with car manufacturers such as General Motors and Ford, will attend a virtual meeting focused on strengthening the “resilience of American supply chains” for semiconductors, according to the White House.

Semiconductors, which make up essential and expensive parts of modern-day gadgets and cars, have seen an explosion in demand in the past decade and in particular during the pandemic, causing an unprecedented global shortage.

The White House meeting signals the Biden administration's attempt to address the supply chain issues and to ease the challenges faced by affected companies and workers, particularly at car companies such as GM and Ford, which have halted production lines at multiple factories due to the shortage.

“This is something that there is a great deal of focus on at the highest level across government,” White House press secretary Jen Psaki said Thursday.

However, in the past, White House officials have said there is no short-term solution for the shortage, and therefore, much of the summit is expected to focus on President Joe Biden's American Jobs Plan, currently being debated, which has $100 billion allotted to alleviating the semiconductor shortage.

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National security adviser Jake Sullivan, National Economic Council Director Brian Deese, and Secretary of Commerce Gina Raimondo will lead the semiconductor meeting, which Biden will “briefly join,” according to his schedule.

Biden has also asked Congress to pass new bills to pay for research and development for semiconductors, which have bipartisan support. However, there is a debate between carmakers and tech companies regarding how to spend and allocate the money.

Automobile manufacturers are pushing for some of the funding to be reserved for car semiconductor chips, claiming there could be a shortfall in production of over a million cars if the industry isn't given help with the chips. Electronic device manufacturers that make computers and cellphones are worried their industries will not be given enough help if this occurs. The debate between the two industries is expected to play out during the White House meeting.

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The future of semiconductor production will play a role in the next generation of technology, from cellphones and advanced computers to artificial intelligence and even 6G wireless provided by telecommunications companies.





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