Biden to sign order improving supply chain for chips, other critical resources

President Biden will sign an executive order Wednesday afternoon aimed at improving the supply chain for semiconductors, or chips, used in many new technologies, along with other critical resources.

Biden administration officials told reporters ahead of the order’s rollout that it would require a 100-day review of the supply chains for chips, used in everything from mobile phones to new cars. It will also require 100-day reviews of the supply chains of large-capacity batteries used in electric vehicles, pharmaceuticals and rare earth minerals also used in new technologies.

The order will require six sector-specific reviews within the next year, focused on evaluating supply chains for the defense, public health, communications technologies, transportation, energy and food sectors, modeled on efforts by the Department of Defense to strengthen its operations.

The order is meant to help address the global shortage of chips, which has hit many companies hard, in particular the auto industry, where chips are used in everything from power steering to brakes, and where workers have been furloughed as a result of the shortage.

“Make no mistake, we are not simply planning to order up reports, we are planning to take actions to close gaps as we identify them,” an administration official told reporters. “We expect that by taking this kind of comprehensive approach to supply chain resilience … we will be able to strengthen our supply chains for the long term.”

The new executive order will prioritize racial inclusion through identifying ways to expand job growth for communities of color and other traditionally marginalized groups.

“Building more resilient, diverse, and secure supply chains will be part of this administration’s effort to revitalize and rebuild domestic manufacturing capacity and create well-paying jobs,” the White House official said.

The order is not focused on any specific countries, but the officials acknowledged that the Biden administration is examining ways the United States may be “excessively dependent” on competitors such as China.

It is intended to build on the “Made in America” executive order signed by Biden last month that is meant to increase federal procurement of U.S.-made goods.

White House press secretary Jen Psaki first announced the impending executive order earlier this month, telling reporters that the shortage of chips was a key motivating factor in rolling out the order.

“The administration is currently identifying potential chokepoints in the supply chain and actively working alongside key stakeholders in industry and with our trading partners to do more now,” Psaki said at the time.