The United States and the European Union signed a joint statement to counter the electronic semiconductor deficit hitting large sectors of global production at a meeting in Pittsburgh on Sept. 29.  

“Semiconductors are the material basis for integrated circuits that are essential to modern-day life and underpin our economies,” the U.S. and EU Trade and Technology Councils said in the document, Fox News reported

They also added, “As such, semiconductors power virtually every sector of the economy, including energy, healthcare, agriculture, consumer electronics, manufacturing, defense, and transportation.”

The meeting was attended by Secretary of State Antony Blinken and Secretary of Commerce Gina Raimondo, who met with European Commission Executive Vice Presidents Valdis Dombrovskis and Margrethe Vestager.

Although no concrete production plans have yet been presented, the strengthening of this alliance was interpreted as a distancing from the hegemony created by the Chinese Communist Party (CCP), one of the major competitors. 

Thus, through the declaration, they committed themselves to “stand together” against the “unfair behavior of state-owned enterprises” without directly mentioning the CCP. 

They added: “We intend to focus on reducing existing strategic dependencies throughout the supply chain, especially through a diversification of the supply chain and increased investment.”

They also said they will “work jointly so that any investment made on our territories is done in full respect of our respective security of supply.”

On the other hand, both the U.S. and the EU are strengthening relations with Japan to boost semiconductor production. 

“The joint U.S.-EU interest in Japan could signal an increased push to distance themselves from China,” author Caitlin McFall commented on the matter. 

While one of the causes of the crisis in semiconductor production has been the interference caused by COVID’s preventive measures, this had already begun during the trade frictions between the U.S. and the Chinese communist regime.

On the other hand, demand for these electronics has skyrocketed as their applications spread to a broader range of consumer goods. 

“This is having an impact across the economy, with automobiles, yes, but even beyond that, in medical devices, networking equipment—we’re hearing regularly from companies that they can’t get the supply they need,” said one of the Biden administration officials.

As a result, the auto industry could lose about $450 billion in global sales from the start of the crisis through the end of 2022, according to Seraph Consulting. 

In this regard, the CEO of Daimler AG’s division Martin Daum, which makes trucks and buses, said on Sept. 22 that at the beginning of this year, the situation could be handled, which has since changed. 

“But since summer the semiconductor situation has worsened for us. Our production in Germany and the U.S. was affected, which led to a situation in which we could deliver fewer vehicles to our customers.”

Toyota, for its part, cut production at 14 factories in Japan due to a lack of semiconductors. Ford and General Motors have suspended production for weeks at more than a dozen North American factories in recent months.

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