Biden planning order to increase US chip production

President Biden is planning to pen an executive order designed in part to improve the physical production of chipsets in the US. That may come as welcome news to 5G providers.

Mike Dano, Editorial Director, 5G & Mobile Strategies

February 11, 2021

3 Min Read
Biden planning order to increase US chip production

President Biden is planning to issue an executive order in the coming weeks that could increase the domestic production of silicon for applications ranging from power steering to 5G.

The effort "will be focused on identifying the immediate actions we can take, from improving the physical production of those items in the US, to working with allies to develop a coordinated response to weaknesses and bottlenecks that are hurting American workers," White House Press Secretary Jen Psaki said Thursday, according to The Hill.

Biden's efforts are a reaction to chip shortages that have affected industries ranging from automotive to video gaming. According to CNBC, chip scarcity for vehicles functions such as power steering and brakes has cost the global auto industry more than $60 billion in revenue this year.

US 'uncompetitive' in chips for new applications

The announcement comes on the same day that the Semiconductor Industry Association (SIA) warned that the US has grown "uncompetitive" in developing chips for applications including artificial intelligence, 5G/6G and quantum computing.

"Our share of global semiconductor manufacturing has steadily declined from 37% in 1990 to 12% today," the association wrote in a letter to Biden, asking for funding for chipset development and manufacturing. "This is largely because the governments of our global competitors offer significant incentives and subsidies to attract new semiconductor manufacturing facilities, while the US does not."

Executives from SIA member companies including Qualcomm, Skyworks, Intel, Marvell, Xilinx and Nvidia signed the letter. The companies are all heavily involved in designing chips for 5G products, though many outsource the actual construction of those chips to companies with manufacturing facilities in locations ranging from Taiwan to Vietnam.

To be clear, this isn't the first time players in the 5G industry have worried over the supply of critical silicon for products and services. "Let's tackle the real threat – the danger of Chinese leadership in radio chips and related technologies. In discussions with policymakers, all agree on the need to invest R&D in 5G. Let's concentrate this spending American chip innovation, so that American technology will again surpass China's," wrote Steve Papa, CEO of Parallel Wireless, in a policy article last year.

Biden isn't the first US president to tackle the issue. For example, the Trump administration last year was reportedly in talks with semiconductor companies over the construction of new chip plants in the US to reduce US reliance on Asian factories.

And there have been some developments on the topic. For example, Taiwan Semiconductor Manufacturing Co. (TSMC) last year confirmed it will build a second semiconductor fabrication plant (fab for short) in the US. The company's planned facility will focus on 5-nanometer technology for semiconductor wafer fabrication and have capacity for 20,000 semiconductor wafers per month. The project is expected to total $12 billion through 2029.

TSMC already operates a fab in Camas, Washington.

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Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano

About the Author(s)

Mike Dano

Editorial Director, 5G & Mobile Strategies, Light Reading

Mike Dano is Light Reading's Editorial Director, 5G & Mobile Strategies. Mike can be reached at [email protected], @mikeddano or on LinkedIn.

Based in Denver, Mike has covered the wireless industry as a journalist for almost two decades, first at RCR Wireless News and then at FierceWireless and recalls once writing a story about the transition from black and white to color screens on cell phones.

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