The U.S. needs to invest in its domestic capabilities for critical materials, minerals and semiconductors to better ensure the availability and resilience of its supply chains for national and economic security, says a White House report released Tuesday that examined vulnerabilities in four product areas.
Among the report’s recommendations are that Congress provide at least $50 billion for investing in the domestic manufacturing of advanced semiconductors and foster research and development for computer chips to make sure they are developed and manufactured in the U.S.
The report also says a new interagency working group, led by the Department of Interior, has been established to find sites in the U.S. to develop and produce critical minerals sustainably and responsibly.
“China was estimated to control 55 percent of global rare earths mining capacity in 2020 and 85 percent of rare earths refining,” says the 250-page report, Building Resilient Supply Chains, Revitalizing American Manufacturing, and Fostering Broad-Based Growth. “The United States must secure reliable and sustainable supplies of critical minerals and metals to ensure resilience across U.S. manufacturing and defense needs, and do so in a manner consistent with America’s labor, environmental, equity and other values.”
The report includes four assessments of supply chain vulnerabilities in the areas of semiconductor manufacturing and advanced packaging, large capacity batteries, critical minerals and materials, and pharmaceuticals and their ingredients. The Department of Commerce led the semiconductor review and the Department of Defense assessed critical minerals and minerals.
The 100-day reviews were done at the behest of Executive Order 14017, which was issued by President Joe Biden on February 24, to strengthen the resiliency of U.S. supply chains. The directive also calls for reviews of six industrial base sectors critical to national and economic security, including the defense industrial base, and the information and communications technology industrial base.
The industrial base reviews are ongoing and will be completed by February 24, 2022.
DoD in its assessment of critical minerals and materials highlights that even though the U.S. military relies heavily for these items, civilian industries are at greater risk to disruptions.
“The concentration of global supply chains for strategic and critical materials in China creates risk of disruption and politicized trade practices, including the use of forced labor,” Defense Secretary Lloyd Austin said in a statement. “Though DoD has requirements for strategic and critical materials, the civilian economy would bear the brunt of the harm from a supply disruption event.”
Semiconductors, critical minerals and materials are used in everything from household appliances, consumer electronics and advanced weapons.
DoD’s recommendations included in its section of the report call for public-private efforts to work toward “sustainability standards” for the production of strategic and critical minerals, including requiring sustainability as a feature of U.S. government procurement. Other recommendations include expanding domestic development, manufacturing and recycling, take advantage of existing mechanisms like the Defense Production Act to issue grants and loans to subsidize and incentivize industrial capacity and to acquire materials, use existing laws to convene industry to identify opportunities to expand domestic production, expand research and development efforts across government to go beyond early-stage efforts and include demonstration efforts and commercialization, and strengthening U.S. stockpiles.