Washington – U.S. President Joe Biden vowed Monday to strengthen the resilience of U.S. supply chains for semiconductors amid a global supply shortage, pitching a $50 billion investment plan for the industry.
“China and the rest of the world is not waiting, and there’s no reason why Americans should wait,” Biden told a virtual CEO summit involving the technology, chip and automotive industries. “We’re investing aggressively in areas like semiconductors and batteries. That’s what they’re doing and others; so must we.”
The participants included executives not just from U.S. companies but also those from South Korea’s Samsung Electronics Co. and Taiwan Semiconductor Manufacturing Co., according to the Semiconductor Industry Association (SIA), based in Washington.
The Biden administration has been stepping up its calls to create secure supply chains for semiconductors and critical minerals such as rare earths, amid concerns over U.S. reliance on China for such goods.
Recent global chip shortages have forced slowdowns at car manufacturing plants in the United States.
Efforts to bolster supply chains are also expected to be on the agenda when Biden meets with Prime Minister Yoshihide Suga on Friday at the White House.
According to the SIA, the share of global chip manufacturing capacity based in the United States has decreased from 37% in 1990 to 12%.
“This decline is largely due to substantial subsidies offered by the governments of our global competitors, placing the United States at a competitive disadvantage in attracting new construction of semiconductor manufacturing facilities,” the association said in a statement released the same day.
Noting that federal investment in semiconductor research has been flat as a share of gross domestic product, it also welcomed Biden’s call on Congress to invest $50 billion in manufacturing and research in the area.
The proposal has been included in a $2 trillion investment plan aimed at creating millions of jobs and rebuilding infrastructure, unveiled by Biden in late March.
According to a report released by SIA together with Boston Consulting Group, about 75% of global semiconductor manufacturing capacity is concentrated in mainland China and elsewhere in East Asia, a region significantly exposed to high seismic activity and geopolitical tensions.
In addition, more than 90% of the world’s most advanced semiconductor manufacturing capacity is currently located in Taiwan, it said.
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