Skip to main content
Welcome to
super saver spring
offer ends april 20
save over $140
save over 85%
$0.99
per week for 24 weeks
Welcome to
super saver spring
$0.99
per week
for 24 weeks
// //

U.S. President Joe Biden signs an executive order, in the Oval Office of the White House, in Washington on Feb. 2, 2021.

Evan Vucci/The Associated Press

U.S. President Joe Biden will sign an executive order on Wednesday aimed at addressing a global semiconductor chip shortage that has forced U.S. automakers and other manufacturers to cut production and alarmed the White House and members of Congress, administration officials said.

The scarcity, exacerbated by the pandemic, will be the subject when Biden meets with a bipartisan group of U.S. lawmakers on Wednesday to discuss the issue.

Administration officials said Biden’s executive order, to be signed at 4:45 p.m. EST (2145 GMT) on Wednesday, will launch an immediate 100-day review of supply chains for four critical products: semiconductor chips, large-capacity batteries for electric vehicles, rare earth minerals and pharmaceuticals.

Story continues below advertisement

The order will also direct six sector reviews – Modelled after the process used by the Defense Department to strengthen the defence industrial base. It will be focused on the areas of defence, public health, communications technology, transportation, energy and food production.

The United States has been besieged by supply shortages since the onset of the pandemic, which squeezed the availability of masks, gloves and other personal protective equipment, hurting frontline workers.

The chip shortage, which in some cases is forcing automakers to take employees off production lines, is the latest example of supply bottlenecks hurting American workers.

“Make no mistake, we’re not simply planning to order up reports. We are planning to take actions to close gaps as we identify them,” the administration official added.

A group of U.S. chip companies earlier this month urged Biden to provide “substantial funding for incentives for semiconductor manufacturing” as part of his economic recovery and infrastructure plans. Last summer they supported bipartisan legislation to provide “tens of billions of dollars” to help pay for chip manufacturing and research.

The chip scarcity has quickly grown into a major headache for the White House.

Ford Motor Co recently said a lack of chips could cut the company’s production by up to 20% in the first quarter while General Motors said it was forced to cut output at factories in the United States, Canada and Mexico and would reassess its production plans in mid-March.

Story continues below advertisement

U.S. semiconductor firms account for 47% of global chip sales but only 12% of production because they have outsourced much of the manufacturing overseas, according to the Semiconductor Industry Association. In 1990, the U.S. accounted for 37% of global semiconductor production.

Biden, a Democrat, has been under pressure from Republican lawmakers to do more to protect American supply chains from China by investing in domestic manufacturing of next-generation semiconductor chips.

“I strongly urge Biden administration to prioritize protecting emerging and critical technologies, like semiconductors, from the grasp of the CCP (Chinese Communist Party),” U.S. Representative Michael McCaul wrote in a recent letter to the White House from Republicans on the House of Representatives Foreign Affairs Committee.

Under Biden’s order, the White House will look to diversify the United States’ supply chain dependence for specific products such as rare earth minerals from China.

It will look to develop some of that production in the United States and partner with other countries in Asia and Latin America when it cannot produce such products at home, the official said.

The review will also look at limiting imports of certain materials and train U.S. workers to ramp up production at home.

Story continues below advertisement

The supply chain executive order will add to Biden’s vow in January to leverage the purchasing power of the U.S. government, the world’s biggest single buyer of goods and services, to strengthen domestic manufacturing and create markets for new technologies.

Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow topics related to this article:

View more suggestions in Following Read more about following topics and authors
Report an error
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

UPDATED: Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies