White House virtual summit to focus on global chip shortage

Yahoo Finance’s Jessica Smith joins the Yahoo Finance Live panel to discuss today’s White House virtual meeting of senior executives of Ford Motor, General Motors, Intel, and Alphabet to address the global chip shortage that has hobbled auto manufacturing and other industries.

Video transcript

- We begin today, though, over in Washington. The Biden administration officials are meeting with senior executives to address the global chip shortage that's halted production across sectors. Let's bring in Yahoo Finance's Jessica Smith, who's tracking this story for us. And Jess, we know the administration has already set aside about $50 billion in investments within the infrastructure plan to address this issue. What more are we expecting in the meeting today?

JESSICA SMITH: Well, we are expecting more than a dozen executives to talk with administration officials about the implication of the shortage and then ask them for certain provisions, potentially tax credits and more money for R&D. We'll see what specifics these executives ask about later this afternoon. This meeting should get started any minute now. Executives from Ford, GM, Alphabet, Micron, Intel, and several others will be there.

President Biden is set to briefly jump in the summit. He's not going to be there for the whole time. But other national security officials and economic officials will be in that meeting.

Of course, automakers have had to cut production because of this shortage. And administration officials say that supply chain weaknesses really do present national security vulnerabilities. So this issue is important both to the economic team and the national security team. We have heard from the semiconductor industry asking for tax incentives-- again, more funding for R&D and manufacturing.

President Biden has, as you mentioned, included measures in his infrastructure plan to address the chip shortage-- $50 billion for manufacturing and research and then another $50 billion to support the production of critical goods. There are several other pieces of the plan that will focus on strengthening US manufacturing and making supply chains more resilient.

Now, there is bipartisan agreement in Congress that this is an issue that needs to be addressed. The president has already met with lawmakers about this issue. And later this week, the Senate Commerce Committee is set to hold its first hearing on a bipartisan bill that would boost R&D in an effort to make the US more competitive with China. So we'll keep an eye on what comes of this meeting today, and then if we see any more details about potential legislation throughout the week.

- It certainly feels like there's increased urgency, especially given how many car makers have already halted production because of that shortage. Jessica Smith bringing that to us from Washington, DC.