Critical Infrastructure: Supply Chain Risk, Semiconductor Shortages

The White House announced a new initiative on securing the supply chain in several critical infrastructure sectors including Active Pharmaceutical Ingredients (API’s) necessary for medicines to combat the COVID-19 pandemic, rare earth minerals, advanced batteries and, semiconductor chips & advanced packaging.

The executive order will order an immediate 100-day review by federal agencies to assess vulnerabilities in these areas as well as a broader one-year review of supply chain risks across several critical infrastructure sectors including the defense industrial base; the public health and biological preparedness industrial base; the information and communications technology (ICT) industrial base; the energy sector industrial base; the transportation industrial base; and supply chains for agricultural commodities and food production.

A growing problem is a world-wide shortage of key semiconductor chips in several industries including automotive manufacturing. According to a report in the Wall Street Journal, both Ford and General Motors have had to slow or suspend production lines due to chip shortages.

While the planned Executive Order will not alleviate the immediate crunch in semiconductor supply, the Administration and leaders in Congress have begun work on legislation to spur new investments in domestic semiconductor manufacturing.