White House warns of ‘escalating vulnerabilities’ to U.S. from semiconductor shortage

The White House has been pushing Congress to approve U.S. subsidies for semiconductor chips manufacturing after months of discussions.

The White House held a classified briefing on Wednesday with some U.S. lawmakers on the dire risks to the American economy from semiconductor supply chain issues as it pushes Congress for $52 billion in funding to subsidise production.

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White House National Economic Council Director Brian Deese told reporters "the best estimates are the lack of available semiconductors probably took a full percentage point off of GDP in 2021."

The briefing included Commerce Secretary Gina Raimondo, Deputy Defense Secretary Kathleen Hicks, National Security Advisor Jake Sullivan to "discuss the urgent need to invest in made-in-America semiconductors as well as research and development that will protect our economic and national security," the White House said.

A persistent industry-wide shortage of chips has disrupted production in the automotive and electronics industries, forcing some firms to scale back production. There have been growing calls to decrease reliance on other countries for semiconductors.

"A significant interruption to our supply of semiconductors could cause historic damage to the U.S. economy – damage far greater than the impact of chips shortages on the American auto industry right now – and would undercut our technological competitiveness and military advantages over adversaries globally," the White House said.

The White House has been pushing Congress to approve U.S. subsidies for semiconductor chips manufacturing after months of discussions.