Biden says Congress needs $37 billion to address short term chip needs--update

Holding a tiny semiconductor, President Biden described how important chips have become to modern society and the need to protect the domestic supply chain that makes them. (WH.gov)

President Biden signed an executive order on Wednesday to take steps boosting chip supply chain resiliency. He also briefly mentioned near the end of his remarks that Congress needs $37 billion to address chip supply needs in the short term.

"We need to make sure these supply chains are secure and reliable," he said, according to an official White House transcript of the comments. "I’m directing senior officials in my administration to work with industrial leaders to identify solutions to this semiconductor shortfall and work very hard with the House and Senate.  They’ve authorized the bill, but they need (inaudible) $37 billion, short term, to make sure we have this capacity.  We’ll push for that as well.  But we all recognize that the particular problem won’t be solved immediately."**

The president also invoked an old proverb about horseshoe nails to decry the shortage of computer chips needed in recent months for automobile assembly.

“Remember that old proverb: for want of a nail, the shoe was lost; for want of a shoe the horse was lost,” he said. “It goes on and on until the kingdom was lost, all for the want of a horseshoe nail.”

Holding up a tiny semiconductor, he added, “Even small failures at one point in the supply chain can cause outsize impacts further up the chain.  Recently, we’ve seen how a shortage of computer chips like the one I have here. It has caused delays in production of automobiles that resulted in reduced hours for American workers—the 21st century horseshoe nail.”

He went on to describe the chip in his fingers as smaller than a postage stamp yet filled with 8 billion transistors ten thousand times thinner than a single human hair. “These chips are a wonder of innovation and design that power so much of our country and enable so much of our modern lives to go on, not just our cars but our smartphones, radios, medical diagnostic equipment and so much more…We need to make sure these supply chains are secure and reliable.”

President Biden met with a bipartisan group of congressional leaders earlier in the day who have authorized a bill to help domestic chip production, but added they need $37 billion in the short term.He didn’t elaborate on the price tag or what it covers.  “We’ll push for that [funding] as well, but this particular problem won’t be solved immediately,” he said. In the meantime, the U.S will reach out to producers to ramp up production to resolve chip bottlenecks.

In some cases, production for chip elements will mean increasing production of material elements at home. He also called for increasing surge capacity for manufacture of chips and investing in research and development.

“We need to stop playing catch up,” he said.

**This story was updated with comments from an official White House transcript.

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