Semiconductor manufacturers to hand over data to US Government – UPDATE

UPDATE, November 10: All of the world's major semiconductor manufacturers have agreed to provide supply data to the United States Government as part of the authority's move to reduce stockpiling.

Commerce Secretary Gina Raimondo set a deadline for the chip suppliers to voluntarily pledge to provide stock supply data before triggering the Defence Production Act.

Raimondo said all producers contacted were willing to comply with the Government's request – although sensitive customer data wouldn't be provided, according to Automotive News.

"The past two weeks, I personally have called the CEOs of all the major chip producers in the US and overseas, and every CEO has assured me that they will be complying and will be giving us the data that we've asked for," said Raimondo.

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The story to here

September 27: The United States Government wants companies within the supply chain of semiconductors to hand over inventory data in an attempt to minimise stockpiling.

A worldwide shortage of semiconductors is currently crippling the automotive industry – as well as the wider consumer goods sector – with many manufacturers being forced to idle their factories, not having supply of the parts necessary to finish the production of some vehicles.

Bloomberg reports the Biden administration's Commerce Secretary, Gina Raimondo, is considering introducing a law which will force companies to submit reports of stock inventory – alleviating bottlenecks in the industry by making sure no one is stockpiling chips.

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While the Commerce Department has been involved in meetings with representatives from different affected industries, a majority of companies have refused to hand over data – potentially forcing Raimondo to invoke the Defense Production Act.

“What I told them is, 'I don’t want to have to do anything compulsory', but if they don’t comply then they’ll leave me no choice,” said Raimondo.

“I said today we’re evaluating all of our options right now, all the tools. I hope not to go there, but we need to see some progress and we definitely need compliance.

“There’s allegations of certain consuming companies buying two or three times what they need and stockpiling.

“So suppliers say, ‘we can’t get a handle on an accurate demand signal because consumers are stockpiling, so we don’t know what the accurate demand is.’

"Some consumers are saying ‘we can’t get straight answers from suppliers, how come I was told I could have X and now I’m being told I can only have half of X?’”

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First introduced in 1950 during the Korean War, the Defense Production Act requires companies to hand over records of supply inventory for products which are directly related for national defence, whether it be through war or financial hardship.

The Trump administration triggered the Defense Production Act last year in response to the COVID-19 pandemic, a move which forced many industries to remain open despite lockdowns.

Manufacturing giant General Motors struggled with the shortage in August, having to park over 1000 uncompleted vehicles a day, while Toyota recently announced closures of its manufacturing plants in Japan and the USA throughout September.