President Trump on Friday confirmed he has signed the Defense Production Act that allows federal officials to direct companies to produce equipment and supplies needed to fight COVID-19. However, after objections from business leaders, the administration stopped short of actually invoking the Act.
According to a CNN report on Monday morning:
A source familiar with these closed door conversations [with business leaders] described the sentiment as "just tell us what we need to do and we'll do it," as long as the Defense Production Act was not in use. Trump confirmed this Sunday, saying when the war powers act was announced "it sent tremors" through the business community.
On Sunday, Trump tweeted that General Motors, Ford Motor and Tesla had been given the go-ahead to make ventilators and other metal products to help treat the virus. California Governor Gavin Newsom also said that Apple CEO Tim Cook had offered to donate 1 million surgical masks. Other companies have stepped forward as well.
“We are literally being besieged…they want to help our country,” President Trump told reporters Friday a mid-day news conference, referring to the companies.
The 1950s-era act could be used to help produce ventilators for use by hospitals that treat respiratory problems associated with coronavirus, but also to make surgical face masks, gowns and gloves worn by care workers. Even intensive care hospital beds could be produced.
The need for face masks has been so great in some regions that electronics maker Sharp announced in early March that it would make surgical masks at a plant that usually makes displays in central Japan. Sharp is owned by FoxConn.
FierceElectronics asked eight semiconductor and other electronics companies, as well as associations that represent them, if they are offering their products and services to federal officials, but none responded. In most cases, semiconductors are made in fabrication facilities abroad, usually by companies contracted by chip designers to do the work. Intel runs its own fabs, but that is a rarity.
At any rate, it isn’t clear that chips or even larger electronics products are in demand to fight the virus or to treat the disease and protect care workers. The situation could change if the virus continues to sicken people for months or even years.
Jack Gold, an analyst at J. Gold Associates, agreed that “it’s hard to see what semi companies would be compelled to do…I suppose with all their immense engineering talents, they could be put into design projects to get things designed for use, or maybe used for testing of some sort.” Also, it would be difficult to convert a semi fab to produce heavy equipment, Gold said.
As for other electronics makers, “it might be a different story, as many produce products and could be compelled to switch production lines over to needed equipment,” he said. “But even here, you have to find something that’s compatible with their process. You can’t make a vacuum pump on a printed circuit board line. And if you need to retool a line, that’s not something you can do overnight. It could take months.”