Biden considering Defense Production Act to address semiconductor chip shortage: report

The administration has already reportedly threatened companies with doing so

The Biden administration says it is considering using the Defense Production Act as a remedy to address the ongoing shortage of semiconductor chips in the U.S., and have reportedly already threatened companies with the prospect.

Commerce Secretary Gina Raimondo told Bloomberg on Thursday she has warned industry leaders that the DPA is on the table, claiming businesses are not cooperating with the agency's requests for their data regarding supply chains.

Gina Raimondo semiconductor

Commerce Secretary Gina Raimondo, (Photo by Barry Chin/The Boston Globe via Getty Images) Silicon chip image: iStock (Photo by Barry Chin/The Boston Globe via Getty Images / Getty Images)

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"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,’" Raimondo told the outlet. "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."

Also on Thursday, the White House released a briefing on the semiconductor shortage and ways the administration is trying to address the issue.

The memo signaled that greater action from the feds is forthcoming, saying that "an individual firm’s ability to pivot quickly in the face of a shock can be limited by collective action problems—including a lack of communication and trust between firms along a supply chain—and a lack of access to the data necessary to support visibility and agility." It went on to argue, "Government has a unique ability to solve coordination challenges and serve as a trusted source of data."

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In July, one administration official told FOX Business that Raimondo was looking to potentially build several semiconductor plants in the U.S. to help solve the shortages. As of the time of that report, the commerce secretary had met with roughly 50 companies to address the issue, and she encouraged chipmakers to ramp up production.

FOX Business' Edward Lawrence contributed to this report.