White House pushes companies to be transparent on chip supplies

WASHINGTON -- The Biden administration is pressuring companies involved in the semiconductor supply chain to be more transparent as the global chips shortage continues to wreak havoc across many industries, officials said.  

Commerce Secretary Gina Raimondo and National Economic Council Director Brian Deese convened several companies Thursday to discuss how to respond more rapidly to shutdowns around the world, brought about by the spread of the coronavirus, and what comes next for legislation to finance domestic manufacturing that’s lingered on Capitol Hill for months.

Representatives of companies including the Taiwan Semiconductor Manufacturing Co., Samsung Electronics Co., Apple Inc., Intel Corp., General Motors, Ford Motor and Stellantis were expected to attend, according to people familiar with the planning.

Raimondo said it is time to get "aggressive" in addressing the worsening semiconductor chip shortage that has caused automakers and others to cut production and impacted thousands of U.S. workers.

"It’s time to get more aggressive. The situation is not getting better, in some ways it is getting worse,” Raimondo told Reuters in an interview.

She said a voluntary request for information issued on chips to industry this week "will give us more information about the supply chain, and the goal is to increase transparency so we can try to identify where the bottlenecks (are) and then predict challenges."

She warned if companies did not answer the voluntary request "then we have other tools in our tool box that require them to give us data. I hope we don't get there. But if we have to we will."

The shortages have frozen production and dampened sales in a variety of businesses, from cars to laptops.

This was the third such meeting to bring together various industries, from chips producers to users, and the administration’s message continues to be the same as in previous sessions. Raimondo and other officials have emphasized that the private sector must step up and provide more transparency if the government is to successfully address the shortage in the medium term.

Now, however, the administration seems to be heightening the pressure on companies, many of whom have been reluctant to provide information detailing their supply-and-demand structures.

The Commerce Department will request that companies fill out a questionnaire to provide information on inventory, ordering and customer sales in the next 45 days.

Industry response

In a statement Thursday, Ford said it appreciates the administration’s efforts to strengthen the nation’s critical supply chains and support American consumers and manufacturing.

“We encourage all members of the supply chain to support the Department of Commerce’s data collection process to improve transparency and address the semiconductor shortage,” Ford spokeswoman Melissa Miller said in a statement to Automotive News. “In the meantime, our teams are working to maximize production, with a continued commitment to building every high-demand vehicle for our customers with the quality they expect.”

The Alliance for Automotive Innovation, which represents Ford, GM, Stellantis and other major automakers in the U.S., also acknowledged the administration’s ongoing effort to address the “critical supply chain challenge.”

“Leaders from the semiconductor and automotive industries are working diligently to resolve the global chip shortage as quickly and efficiently as possible and are working to strengthen transparency and resiliency in the automotive semiconductor supply chain,” John Bozzella, CEO of the alliance, said in a statement. “Today’s discussion was an important opportunity to continue efforts to improve the automotive semiconductor supply chain and set the foundation for mid- and long-term capacity solutions.”

Asian crisis

The issues facing the supply chain now largely center around the spread of the delta variant in Southeast Asian countries like Malaysia and Vietnam, where semiconductor plants had to shut down because of outbreaks and are now only operating at reduced capacity.

The Commerce and State Departments, along with embassies, will set up an early alert system to ensure that virus-related disruptions in production can be addressed faster. This more formal process to react to such shutdowns replaces the ad-hoc responses that have occurred over the last six months, an official said.

The administration officials said they’re confident the $52 billion in funding for domestic research and manufacturing will receive final approval in the near future and made the case that the additional information requested will help them implement the grant program in a more targeted way.

For now, the legislation, known as the Chips Act, remains stuck in Congress and it’s not clear that taking it up is a priority for leaders in the House. The Senate passed its version in June and the administration has since convened various meetings with lawmakers and industry to forge a path forward.

John Neuffer, president of the Semiconductor Industry Association, said his members appreciate the White House’s engagement on the issue.

“We look forward to working with leaders in Washington to fund the Chips Act and enact an investment tax credit encompassing both manufacturing and design to help ensure the long-term resilience of America’s semiconductor supply chains,” he said.

A senior administration official declined to comment on whether the White House supports the tax credit legislation put forward by Senator Ron Wyden, an Oregon Democrat.

Reuters,  Bloomberg and Automotive News contributed to this report.