A Security Council Official Is Calling for a Federal Office to Oversee Commercial Supply Chains

The federal government is currently lacking capacity to monitor commercial supply chain issues, a member of the National Security Council said on Tuesday, amid an ongoing semiconductor shortage.

Jennifer McBroom, the NSC's director of international economics and competitiveness, said a federal office dedicated to commercial supply chains would allow the government to help industry redress long-standing issues around the semiconductor shortage, while creating effective policies with international stakeholders.

"Semiconductors don't exist in a vacuum, they obviously are part of an important and vast ecosystem," McBroom said at an industry conference. 

The House and the Senate have passed different versions of a $52 billion bill designed to jumpstart domestic semiconductor manufacturing and support tech research in an effort to thwart competition from China. The America COMPETES Act (short for America Creating Opportunities for Manufacturing Pre-Eminence in Technology and Economic Strength) is headed to a conference committee and the president is expected to sign a final version after it passes Congress. 

McBroom said the White House hopes the legislation will still include a critical component previously featured in the bill: an office within the Commerce Department tasked with monitoring global and domestic commercial supply chains. 

The Commerce Department released a report earlier this year warning the semiconductor supply chain was in a "fragile" state with manufacturing fabs operating at more than 90% capacity. Meanwhile, operators reported less than five days of inventory as national demand for chips continued to soar. 

Industry leaders have previously called for a federal office dedicated to commercial supply chain issues, including the National Association of Manufacturers, which said in a statement that the proposed office would feature "game-changing grants, loans and loan guarantees" for manufacturers. 

"We envision this as being a place that can monitor potential impacts to supply chains, whether they are geopolitical, or whether we're talking about fires in Japan or grids in Texas, to really have that global monitoring perspective," McBroom said, adding that the office will provide "a set of tools to actually redress some of those problems," including possible purchase agreements, grants or investments designed to boost U.S. support for domestic chip innovation and manufacturing.