ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon PrintIcon Twitter
Semiconductors

US to lead world again, Biden tells CEOs at semiconductor summit

Taiwan's TSMC says rising American chip investment 'will lift all boats'

U.S. President Biden speaks to CEOs during a virtual summit on semiconductor and supply chain resilience from the White House, with national security adviser Jake Sullivan by his side.   © Reuters

NEW YORK/PALO ALTO, U.S. -- President Joe Biden said the U.S. will invest "aggressively" in the semiconductor sector and is ready to "lead the world again," as his White House met with tech leaders Monday virtually to discuss the resilience of the global chip supply chain.

Heads of 19 companies, including Taiwan Semiconductor Manufacturing Co., Samsung's Device Solutions Division, Intel, Medtronic and Micron, are among the attendees of the CEO Summit on Semiconductor and Supply Chain Resilience, hosted by national security adviser Jake Sullivan and National Economic Council Director Brian Deese.

Chief executives of Google's parent Alphabet, Dell, HP, and AT&T Communications, as well as auto makers General Motors and Ford Motor -- which have been hit particularly hard by the global chip shortage-- are also present.

Biden, who dropped by the meeting early Monday afternoon, said "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 ... so must we," the president said.

Calling chips and wafers "infrastructure of today," Biden vowed to work with business leaders and lawmakers of both parties to pass the American Jobs Plan -- the $2.3 trillion infrastructure bill he unveiled in late March.

The sweeping spending plan includes $50 billion -- a third more than the $37 billion figure Biden initially pushed for -- earmarked for the U.S. semiconductor industry as part of the CHIPS for America program.

"We led the world in the middle of the 20th century. We led the world toward the end of the century, we're going to lead the world again," he continued at the virtual summit Monday.

"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, not continue to slide," Biden said.

Commenting on the event, TSMC said it "applauds President Biden's bipartisan efforts and leadership" on chips and expects the CHIPS for America program to benefit the semiconductor industry as a whole.

"The President's thoughtful remarks confirm a rising tide of U.S. government investment will lift all semiconductor boats," said Peter Cleveland, TSMC Vice President of Global Government Affairs.

Senate Majority Leader Chuck Schumer, a Democrat from New York, is separately leading a push for $110 billion in federal funding to support research and development including in semiconductor-related fields, as part of the Endless Frontier Act. The bill, on which a Senate legislative hearing will be held on Wednesday, would create a new technology directorate at the National Science Foundation to bankroll and facilitate cutting-edge technological innovation in the U.S.

In the daily White House briefing, press secretary Jen Psaki said the Monday chip summit "is not 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 over the long term but also over the short term."

The business summit was held ahead of Biden's Friday meeting with Japanese Prime Minister Yoshihide Suga in Washington, where the two countries aim to announce a deal on working together to secure a supply chain for strategic technology components including semiconductors, Nikkei reported earlier this month.

In February, Biden signed an executive order mandating relevant agencies to identify immediate steps to address vulnerabilities in the semiconductor supply chain.

One key U.S. aim is to increase onshore manufacturing capacity, as the acute global chip shortage highlights the risks of overreliance on foundries in Asia.

"The share of global semiconductor manufacturing capacity in the U.S. has decreased from 37% in 1990 to 12% today. This decline is largely due to substantial subsidies offered by the governments of our global competitors, placing the U.S. at a competitive disadvantage in attracting new construction of semiconductor manufacturing facilities," John Neuffer, president and CEO of the Semiconductor Industry Association, said in a statement Monday.

The SIA represents 95% of the U.S. semiconductor industry, including chip heavyweights such as Intel, Micron, and GlobalFoundries.

"Today's meeting marks the continuation of a strong partnership between the Biden Administration and industry to strengthen America's semiconductor supply chain by enacting federal investments in domestic chip manufacturing and research," Neuffer added.

After Biden's February order, Washington has stepped up talks with Taiwan to cooperate on the issue, including communicating U.S. hopes of attracting more Taiwanese investment.

Last May, TSMC announced its intention to build a $12 billion advanced chip production facility -- its first in two decades -- in the U.S. state of Arizona.

Weeks after Biden's executive order, Intel also revealed plans to spend about $20 billion to build two facilities in Arizona, with construction starting immediately and production to begin in 2024.

"Having 80% of all supply in Asia simply isn't a palatable manner for the world to have its view of the most critical technology," Intel CEO Pat Gelsinger told the BBC at the time. Semiconductors are "the heart of every aspect of human existence going forward. And the world needs a more balanced supply chain to accomplish that. We're stepping in."

The American giant's expansion into the foundry business poses a challenge to TSMC, the world's largest contract chipmaker. Until now, Intel has designed and manufactured the bulk of its most important products in-house, a strategy that helped it dominate U.S. chipmaking for nearly 50 years. But delays in rolling out its own latest chip production technologies to match the rise of Asian chipmaking giants like TSMC and Samsung Electronics, have weighed on Intel's market share in recent years.

Meanwhile, Intel said it is working to address the chip shortage faced by the auto industry. Gelsinger told Reuters Monday that the company is in talks with suppliers of automotive chips to produce their chips in Intel's factories.

"We're hoping that some of these things can be alleviated, not requiring a three- or four-year factory build, but maybe six months of new products being certified on some of our existing processes," Gelsinger told Reuters.

U.S. chip designer Nvidia introduced on Monday its first central processing unit based on technology from the U.K.'s Arm Ltd.

Intel is the world's biggest maker of CPU for data center servers, and Nvidia's processor "Grace" -- which the company says delivers 10 times the performance of today's fastest servers -- creates the most direct competition yet between the two chip giants.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Try 1 month for $0.99

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends July 31st

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to Nikkei Asia has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

Celebrate our next chapter
Free access for everyone - Sep. 30

Find out more