Lawmakers, industry call on Biden to fund semiconductor production amid shortage

A bipartisan group of more than 70 House and Senate lawmakers on Monday called on President Biden to support funds for semiconductor research and manufacturing as Biden hosted a meeting with technology leaders to discuss a critical shortage in chips. 

In a letter to Biden spearheaded by Sen. John Cornyn (R-Texas), the lawmakers asked that he work to fund initiatives for semiconductors created by the CHIPS for America Act, legislation included in the most recent National Defense Authorization Act, noting the need to compete with China. 

“We would specifically request you consider joining us in support of funding levels that are at least the authorized amounts proposed in the original bill as you work with Congress on a package of policies to better compete with China and how best to strengthen our country’s economic competitiveness and resiliency as well as national security,” the lawmakers wrote. 

They specifically cited concerns around keeping up with China on semiconductor manufacturing, describing the need to do so as a “national security priority.”

“The Chinese Communist Party (CCP) has aggressive plans to reorient and dominate the semiconductor supply chain, pouring over $150 billion in semiconductor manufacturing subsidies and investing $1.4 trillion in their efforts to become the dominate global technological power,” the group wrote to Biden. “Even full funding of the originally filed CHIPS provisions pales in comparison to the investments being made by the CCP, which speaks to why consideration of an even higher level of funding is worthwhile.”

The lawmakers also asked that Biden include funds for semiconductor research and manufacturing in the annual budget proposal to enable federal agencies to support the effort to boost chip production.  

“We are committed to meeting the national imperative of securing our critical supply chains and look forward to working with you and your Administration to achieve this vital objective,” they wrote. 

The letter was sent the same day Biden hosted some two dozen leaders involved in semiconductor production at the White House, including the CEOs of Google, AT&T, Dell Technologies, Intel Corp., Ford Motor Co. and General Motors (GM). 

The meeting was held amid an increasing crisis in semiconductor production. A nationwide shortage has hit the automobile sector particularly hard, with chips used in multiple aspects of modern vehicles. GM was forced to shut down production at several North American plants last week due to the shortage. 

Biden addressed the letter during remarks after the meeting, stressing that “China and the rest of the world is not waiting, and there’s no reason why Americans should wait.”

“We’re investing aggressively in areas like semiconductors and batteries. That’s what they’re doing and others; so must we,” he said.

Biden pointed to the American Jobs Plan, his $2.25 trillion infrastructure proposal, in noting that he is seeking a “significant” $50 billion investment to fund the semiconductor initiatives in the CHIPS for America Act as part of the package. 

“For too long as a nation, we haven’t been making the big, bold investments we need to outpace our global competitors,” he said. “We’ve been falling behind on research and development and manufacturing, and to put it bluntly, we have to step up our game.” 

Biden also previously signed an executive order in February to address the semiconductor shortage and several other critical supplies and met with a bipartisan group of lawmakers the same day that included many of the letter’s signatories.

Industry leaders emerged from Monday’s meeting with Biden expressing confidence in the administration’s efforts to combat the chip shortage. 

“It was an excellent meeting,” Google and Alphabet CEO Sundar Pichai said in a statement provided to The Hill. “We appreciate the Biden Administration’s focus on the importance of semiconductor supply to innovation across industries. I was also impressed by the commitment of the President and his team to R&D so we can sustain U.S. leadership in technological innovation and support future economic growth.”

Intel CEO Pat Gelsinger also emerged from the meeting with a positive outlook. 

“It is clear there is broad bipartisan and cross-industry recognition that semiconductor manufacturing is a vital component of our national infrastructure that must be included in the American Jobs Plan,” Gelsinger said in a separate statement. “We should seize this moment in time to solidify American strength and unity in this critical industry.”

The Semiconductor Industry Association (SIA), which represents several of the companies Biden met with, commended Biden for his prioritizing investment in chips. 

“Today’s meeting marks the continuation of a strong partnership between the Biden Administration and industry to strengthen America’s semiconductor supply chain by enacting federal investments in domestic chip manufacturing and research,” SIA President and CEO John Neuffer said in a statement.