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As auto leaders push for set-aside chips, Biden administration remains non-committal

Riley Beggin, The Detroit News on

Published in Automotive News

WASHINGTON — To address the shortage of semiconductor chips kneecapping auto production, CEOs of the Detroit Three used a virtual meeting Monday with major tech companies to ask the Biden administration to help bolster chip production for the automakers.

But the administration has indicated privately to semiconductor industry leaders that it would not support "special treatment" for the auto industry, Bloomberg reported — even as auto industry interest groups used the run-up to the White House meeting to press for exactly that.

Asked directly whether the administration had discussed prioritizing orders for automakers with semiconductor companies, White House Press Secretary Jen Psaki was noncommittal: "One of the reasons the president is stopping by this meeting ... is to hear directly from companies about the impacts, what would help them most through this period of time.

"This isn't a meeting where we expect a decision or an announcement to come out of, but part of our ongoing engagement and discussion about how to best address this issue."

General Motors Co.'s Mary Barra, Ford Motor Co.'s Jim Farley and Stellantis NV's Carlos Tavares sought help with the semiconductor chip shortage. Groups representing major automakers are seeking a set-aside portion of any chip production that comes from negotiations in Congress as they compete with tech companies for the valuable parts. The Biden administration may not be amenable to that.

The auto sector uses "legacy" chips rather than the advanced chips used in electronics and consumes only around a small percentage of chips worldwide. But the chips are vital in the engineering and production of modern vehicles worldwide, especially the high-margin pickups and SUVs that drive profitability in the U.S. market.

 

The CEOs of major tech companies such as Google, Dell, HP, Samsung and AT&T attended the meeting as well. So did the CEOs of major chip producers, including Intel, Taiwan Semiconductor Manufacturing Co., NXP and Global Foundries.

The president also briefly joined the meeting hosted by National Security Adviser Jake Sullivan, National Economic Council Director Brian Deese and Secretary of Commerce Gina Raimondo.

"I've been saying for some time now, China and the rest of the world is not waiting. And there's no reason why Americans should wait. We're investing aggressively in areas like semiconductors and batteries, that's what they're doing and others, so must we," Biden said after the meeting.

He added: "This is a moment for American strength and American unity for government, industry, communities to work together to make sure that we're ready to meet the global competition that lies ahead."

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