US Commerce Secretary Gina Raimondo spoke today about the chip shortage crisis that has engulfed manufacturing and the tech and auto industry. Let’s just say she isn’t optimistic about a quick fix being out there.
“We aren’t even close to being out of the woods.”
Okay. Not exactly encouraging. A new report by the Department of Commerce confirmed those sentiments, saying they don’t expect the problem to go away in six months.
Intel has done its own study. They don’t believe the crisis ends until 2023.
Digging deeper into the DOC report, it says that supply and demand are doing a double whammy on the situation. Demand has been up 17% since 2021.
As for what type of inventory is available, there are just five days worth of chips sitting on shelves worldwide. Back in 2019, there were 40 days worth of chip supply available.
The types of chips that are most in-demand are the chips used in medical devices and automobiles. Those are called “legacy logic chips.”
“Analog chips” are used for image sensors, radio frequency, and power management.
As for what Joe Biden’s administration can or will do about it? Experts say it’s important to pass the CHIPS Act, which would free $52 billion for semiconductor manufacturing in the US. It passed in the Senate but can’t get through the House.