The Biden administration is taking action to restore supply in semiconductors and other key industries like large capacity batteries, critical minerals and pharmaceuticals which have experienced disruptions from the coronavirus pandemic, the White House announced on Tuesday.
The action is “the first step in a whole-of-government effort to strengthen domestic competitiveness and supply chain resilience”, the White House said in a statement. “These efforts are critical because, as the COVID-19 pandemic and resulting economic crisis have shown, structural weaknesses in both domestic and international supply chains threaten America’s economic and national security.”
On the microchip front, the Department of Commerce will bolster its partnership with industry to facilitate information flow between semiconductor producers and suppliers and end-users.
“Building on the success of recent engagements with Japan and the Republic of Korea, including the announcement of more than $17 billion in U.S. semiconductor investments by leading companies in ROK, the Administration will strengthen engagement with allies and partners to promote fair semiconductor chip allocations, increase production, and promote increased investment,” the White House said.
The White House urged Congress to approve $50 billion in investments in domestic semiconductor research and development and manufacturing.
“We recommend Congress support at least $50 billion in investments to advance domestic manufacturing of critical semiconductors and promote semiconductor R&D,” the White House said.
On the battery-making side, the Department of Energy will release a “National Blueprint for Lithium Batteries” that will codify the findings of the battery supply chain review in a 10-year, whole-of-government plan to urgently develop a domestic lithium battery supply chain that also aims to combat the climate crisis.”
A funding of approximately $17 billion will be made available under the Advanced Technology Vehicles Manufacturing Loan Program to support the domestic battery supply chain, the White House said.
On the critical minerals front, the Department of Interior, with the support of the White House Office of Science and Technology Policy, will establish a working group composed of agencies such as the Department of Agriculture and the Environmental Protection Agency to identify sites where critical minerals could be produced and processed in the United States.
Some $3 billion in loan guarantees were already available to support the creation of efficient end-use energy technologies, such as mining, extraction, processing, recovery, or recycling technologies, of critical materials projects, the White House said.
On the pharmaceuticals end, the Department of Health and Human Services will utilize the Defense Production Act and build on current public-private partnerships to establish a public-private consortium for advanced manufacturing and onshoring of domestic essential medicines production.
“The consortium’s first task will be to select 50-100 critical drugs, drawn from the Food and Drug Administration’s essential medicines list, to be the focus of an enhanced onshoring effort,” the White House said.
It said an initial commitment of approximately $60 million will be devoted to develop novel platform technologies to increase domestic manufacturing capacity for active pharmaceutical ingredients, or API.
“Greater API production domestically will help reduce reliance on global supply chains for medications that are in shortage, particularly during times of increased public health need,” the White House said.
Consultancy firm McKinsey has estimated the cost of global disruption to industries from the pandemic at $16 trillion and says that a total of $357 billion needs to spent over the next decade on preparations that include pathogen surveillance, global immunization and medical supply stockpiles for countries to reduce the likelihood of such supply breakdown.