Electronics

A survey released by the US Department of Commerce on the 25th showed that the global semiconductor supply chain is still fragile, and the shortage of chip supply will continue for at least six months. The Commerce Department called on Congress to pass legislation to increase domestic chip production as soon as possible.

The U.S. Department of Commerce said in a survey report on major companies in the global semiconductor supply chain that chip demand in 2021 will increase by 17% compared to 2019. U.S. computer chip supplies have fallen to worryingly low levels, raising the prospect of factory closures. "There is a significant and persistent mismatch between supply and demand for chips, and respondents don't think the problem will go away in the next six months." The Commerce Department's survey of 150 companies showed that stocks of companies using chips fell from 40 days in 2019. A sharp drop to less than 5 days in 2021. This means that if foreign chip production plants are suspended for only a few weeks due to factors such as the new crown pneumonia epidemic, natural disasters, etc., it may lead to the suspension of production of US manufacturing companies and the temporary layoff of workers.

The Commerce Department also said that some chips used by automakers and medical device makers were unusually expensive. The department will “engage the industry in addressing specific segments in the coming weeks. We will also investigate claims that these segments are unusually expensive.” Chip shortages have also disrupted auto production, driving up vehicle prices.

Citing the result, the U.S. government called on Congress to pass stalled legislation to provide $52 billion for domestic chip production. "The chip supply chain remains fragile and Congress must pass chip financing as soon as possible," U.S. Commerce Secretary Raimondo said in a statement. The only way out of this crisis is to rebuild domestic manufacturing capacity.”

The U.S. Department of Commerce issued a notice to major companies in the global semiconductor supply chain in September 2021, requiring them to provide the U.S. with information such as inventory, production capacity, and sales within 45 days to determine the global semiconductor supply bottleneck. Raimondo said in November that she had spoken to "all the CEOs in the supply chain, including Samsung, TSMC, SK Group, etc. All the CEOs assured me that they would submit reliable and complete data flow".

According to the survey results released on the same day, the interviewed companies believe that the main supply bottleneck of the semiconductor industry is insufficient capacity of chip factories, and other bottlenecks include the lack of semiconductor raw materials and electronic assembly components.