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Federal government taking a tougher stance due to lack of chips may suspect hoarding

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  • The U.S. government does not intend to force companies to make chips using the Defense Production Act (it takes too long), but what is happening with better information from automakers and other major chip users? It’s really happening that you might use it to understand.
  • Secretary of Commerce Gina Raimondo wants information about how many chips a company actually needs and how many chips they may have.
  • According to the Semiconductor Industry Association, chip makers will increase production by 8% since early 2020 and by 16% by the end of 2022.

    The ongoing shortage of semiconductor chips affecting the production of high-tech products around the world continues to make new car manufacturing difficult for the automotive industry. The problem has been mellow since late 2020 and actually started to boil in the spring of 2021. And now, the Biden administration may begin to take extraordinary steps to resolve the issue. Without change, some experts say the tip shortage could continue until late 2023.

    White House possible solutions Includes the Defense Production Act (DPA), which came into force in 1950 during the Korean War. The Federal Emergency Management Agency (FEMA), which exercises the DPA, describes the DPA as “a major source of information for presidential authorities to promote and expand the supply of materials and services from the US industrial base needed to promote defense.” calling.

    In this case, according to Bloomberg, the president could call on DPA to alleviate the supply chain disruption that caused the industry to build millions less new cars than originally planned. The report was released after the White House held its second meeting with stakeholders such as Ford and General Motors, as well as 20 other companies such as Apple and Microsoft. Washington post Report — Discuss Thursday’s tip shortage.

    One of the main reasons for the meeting was to help the government better understand what was really happening in the field. Secretary of Commerce Gina Raimondo asked industry representatives for information on how many chips these companies have and how many chips they need or want to buy. This is where DPA comes in. Governments can use DPA to force companies to disclose this information if they are not willing to give up. A Commerce Department spokesperson confirmed this stance on the post. Bloomberg reports that the government has been asking for this information for months, but it didn’t help.

    There are two reasons why the government wants to know these details. First, we need to better understand whether car makers are hoarding chips. Second, it is necessary because automakers have reported that they are ordering chips from semiconductor manufacturers that are larger than they actually need because they do not expect chip makers to actually provide complete chips. I want to know the exact number of chips. Orde. So basically, the government wants to understand how bad the crisis really is.

    “What I said to them was,’I don’t have to do anything coercive, but if they don’t obey, they won’t leave me a choice,'” Secretary Lymond said. Told Bloomberg. “Today we said we’re evaluating every option, every tool. We hope we don’t go there, but we need to see some progress and compliance is a must. . “

    According to the Semiconductor Industry Association, semiconductor factories around the world will increase production by 8% from the first few months of 2020 and by the end of 2022 by more than 16%. director..

    Other government actions that could alleviate the chip shortage include a $ 52 billion federal subsidy to boost domestic semiconductor manufacturing. The Post reports that the Senate passed a law that provides this money, backed by the White House, but not the House of Representatives.

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Federal government taking a tougher stance due to lack of chips may suspect hoarding

Source link Federal government taking a tougher stance due to lack of chips may suspect hoarding

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