President Joe Biden is expected to sign an executive order Wednesday calling for a supply chain review of semiconductors and IT technologies, the former of which is being done to address chip shortages that are impacting multiple industries.
The White House said the move will be part of a comprehensive review of U.S. supply chains for critical and essential goods, and it directs federal agencies to departments to “identify ways to secure U.S. supply chains against a wide range of risks and vulnerabilities.” The order will also “facilitate needed investments to maintain America’s competitive edge and strengthen U.S. national security.”
Biden’s plan to sign the executive order comes after several top U.S. semiconductor executives urged President Joe Biden earlier this month to rekindle domestic chip manufacturing with “substantial funding” as part of the White House’s economic recovery and infrastructure plan.
“In recent years, American households, workers, and companies have increasingly felt the strain of shortages of essential products—from medicine to food to computer chips,” the White House said in a fact sheet, adding that recent automotive chip shortages
In the fact sheet for the executive order, the White House said supply chains for semiconductors and advanced chip packaging technologies will be among four key areas where federal agencies will be directed to commence a 100-day review. The White House acknowledged an underinvestment in semiconductor production that has caused to manufacturing to shift overseas — a key issue highlighted by the U.S. semiconductor executives in their recent letter to Biden.
“The United States is the birthplace of this technology, and has always been a leader in semiconductor development,” the White House said. “However, over the years we have underinvested in production — hurting our innovative edge — while other countries have learned from our example and increased their investments in the industry.”
The 100-day supply chain review will also look at critical minerals, including rare earths that are used for a variety of products, as well as large-capacity batteries and active pharmaceutical ingredients.
Beyond the 100-day review, the executive order will call for a one-year review of a “broader set of U.S. supply chains” that includes information and communications technology and other key sectors such as the defense, energy and agriculture.
As part of this one-year review, federal agencies will be directed to review risks to these supply chains and identify key manufacturing locations, the availability of substitute materials, the state of workforce skills and the role of transportation in facilitating such supply chains. Agencies will then be expected to issue recommendations on how to manage such risks and propose new research and development.
The White House said it will commit to a “regular, ongoing process of reviewing supply chain resilient” and that the Biden administration will consult with a wide range of external stakeholders, including private companies, academic organizations, communities, labor unions and non-federal governments.
Dominic Daninger, vice president of engineering at Nor-Tech, a Burnsville, Minn.-based high-performance computing system integrator, called the incoming executive order an “excellent” move and said shortages of chips and other components are very real issues that can have a material impact on several industries, including bioinformatics companies and mechanical parts manufacturers that rely simulation and modeling applications.
For instance, he said, a specific chassis for a GPU workstation from server vendor Supermicro currently has a lead time of 16-20 weeks, which is holding up development work for a large medical technology customer that needs new systems to accelerate simulation and modeling work.
“They’re trying to do some development work here, and this really throws a roadblock in the progress,” he said.