Biden Looks to Intel’s U.S. Investment to Buoy His China Agenda

But the center of gravity for the global industry is still in East Asia. While the United States accounts for much cutting-edge research and design in the chip industry, it has gone from being the world’s largest producer of semiconductors several decades ago to mostly outsourcing production to Asian factories.

That has proved to be a vulnerability as pandemic-related shutdowns left companies around the world short of workers and raw materials, leading to shortages and spiraling prices for a variety of goods, especially semiconductors. Automakers in particular have been affected, with almost every major carmaker forced to curtail production last year.

Chip shortages have also become one of the largest single factors stoking inflation, now a key gripe among American voters as the midterm elections approach. Inflation hit a 40-year high in December, buoyed by a 37 percent increase in the price of used cars.

In an effort to ease the chip shortages, the Biden administration has convened gatherings with semiconductor executives, established a global alert system to identify shortages and requested vast amounts of information from chip companies on potential bottlenecks. The Commerce Department is expected to release some of that information publicly before the end of the month.

Gina Raimondo, the commerce secretary, said in a statement on Friday that Intel’s investment was a win for the company, for American manufacturing and for “American consumers who can look forward to lower prices as we bring home production of the semiconductors that keep our economy running.”

But analysts say the administration has little control over any short-term trends in the industry, given the long lead times necessary to build semiconductor facilities.

Mr. Neuffer said his industry applauded the attention the White House was giving to the sector, including encouraging companies to share more information. “But the reality is, there’s only so much government can do,” he said. “These are very complicated, deep global supply chains, and the market is just going to have to work through this.”

Catie Edmondson contributed reporting.

Article source: https://www.nytimes.com/2022/01/21/us/politics/biden-intel-semiconductors-china.html