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The Biden Administration has taken some initial steps towards identifying vulnerabilities in the semiconductor manufacturing and advanced packaging supply chain, which was one of the four critical supply chains addressed in President Biden’s February 24, 2021 Executive Order on “America’s Supply Chains” (“the Supply Chain EO“).  As detailed in our March 2, 2021 blog post, the Supply Chain EO requires relevant government agencies in these four critical areas to submit a report within 100 days identifying vulnerabilities and proposing policy recommendations.  (It also requires agencies to submit reports on broader industry sectors within one year.)

First, on March 15, 2021, the Bureau of Industry and Security (“BIS”) in the US Commerce Department published a Notice of request for comments (“March 15 Notice”).  BIS requested comments on a range of issues, including the critical and essential goods and materials underlying the semiconductor manufacturing and advanced packaging supply chain, risks or contingencies that may disrupt the semiconductor supply chain, and policy recommendations.  Comments are due on April 5, 2021.

BIS then announced via a March 30 Federal Register notice that on April 8, 2021, just three days after comments under the March 15 Notice are due, it will hold a “Virtual Forum for Risks in the Semiconductor Manufacturing and Advanced Packaging Supply Chain” (“Virtual Forum”).  The Virtual Forum, which will begin at 2:00 p.m. Eastern Daylight Time (EDT), will allow participants to orally address the policy objectives listed in the Supply Chain EO and the issues mentioned in the March 15 Notice.  BIS has created a page for the virtual forum through which registrations, including requests to speak, must be submitted by 5:00 p.m. EDT on April 1, 2021.

The March 15 Notice and Virtual Forum offer companies and other stakeholders in the semiconductor and advanced packaging industry an opportunity to raise concerns about supply chain vulnerabilities and make suggestions on the appropriate policies to address those vulnerabilities.  We expect to see similar actions by the other agencies responsible for the 100-day reports for the other three critical supply chains identified in the Supply Chain EO (i.e., high-capacity batteries (including electric vehicle batteries), critical minerals and strategic materials (including rare earth elements), and pharmaceuticals and active pharmaceutical ingredients.)

These latest steps by the Biden Administration come on the heels of an important update in the Legislative Branch.  The House Armed Services Committee recently launched a task force to investigate the potential vulnerabilities in key supply chain areas, including semiconductors and microelectronics.  The co-chairs, Representatives Elissa Slotkin (D-Mich.) and Mike Gallagher (R-Wis.), will lead the three-month effort to identify the highest-risk supply chain vulnerabilities and propose actions to address them.  The task force will fast-track legislation to address these vulnerabilities, which it aims to draft by June.  This could result in somewhat overlapping and parallel efforts in the executive and legislative branches.

Key Takeaways:

  • In furtherance of the Executive Order on America’s Supply Chains that President Biden signed on February 24, 2021, the Biden Administration has provided companies and other stakeholders in the semiconductor and advanced packaging industry with opportunities to weigh in on vulnerabilities in their supply chain and the appropriate policy recommendations to address those vulnerabilities through (1) submitting comments in response to a March 15 Notice, which are due by April 5, 2021; and (2) participating in the “Virtual Forum for Risks in the Semiconductor Manufacturing and Advanced Packaging Supply Chain” on April 8.  Registrations and request to speak must be submitted by 5:00 pm EDT on April 1, 2021.
  • In Congress, the House Armed Services Committee launched a task force to investigate supply chain vulnerabilities in key areas, which aims to fast track drafting new legislation by June.
  • We expect to see more of this type of outreach for other supply chains going forward.
Author

Kerry Contini is a partner in the Firm’s Outbound Trade Practice Group in Washington, DC. She has served as co-chair of the Firm's Pro Bono committee for several years and has managed award-winning pro bono work involving Baker McKenzie professionals in North America, Europe and Asia. She has written on export controls and trade sanctions issues for several publications, including The Export Practitioner and Ethisphere. Kerry is a co-chair of the Export Controls and Sanctions Section of the Association of Women in International Trade. She joined the Firm as a summer associate in 2005 and became a full-time associate in 2006.

Author

Graham R. Cronogue is a litigation associate in Baker & McKenzie's Washington D.C. office.