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EO on chip production draws bipartisan support

WASHINGTON DC (Axios): Since we wrote a lot yesterday on deep partisan divides, it’s worth noting that politicians of all stripes are coming together to address both a severe chip shortage in the near term and the longer-term threat posed by reliance on China.
On Wednesday, Biden signed an executive order to address strategic tech components. Among other things, Biden called for $37 billion of investment to support U.S. chipmaking. Congress has indicated support for the move, but has yet to fully fund the effort.
Tech production is reliant on a steady flow of chips. While many key semiconductors are designed here and some chips are made here, only about 12% of global manufacturing is done in the U.S. That’s down from 37% of the global market produced in the U.S. as of 1990.
The executive order also addresses other components, including rare earth elements, which are key to many tech products.
Texas Republican Rep. Mike McCaul told Axios’ Alayna Treene he was ple-ased Biden is prioritizing shifting supply chains out of China and into the U.S.
McCaul called the pandemic, which has caused a range of production snags since last spring, a “wake-up call to our critical nati-onal supply chain, and the national security aspects of it.”
Yes, but: Improving Am-erican competitiveness and boosting U.S. support for chipmaking are more likely to help the U.S. in the long run than to resolve the present chip shortage. New fac-ilities take years to come online.
On the plus side, GM indicated Wednesday that the worst might be over.
The big picture: The chipmaking landscape is complex. U.S. companies like Qualcomm, Apple and Nvidia design chips here but rely on overseas contract manufacturers such as TSMC (Taiwan) and Samsung (Korea). Intel both designs and builds its own chips, but it’s struggling with its own manufacturing problems.
So spurring more domestic production will likely require the contract manufacturers to create jobs stateside, something both Samsung and TSMC have shown interest in doing.

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