The Biden administration has determined that a global semiconductor shortage will last at least through the second half of 2022
FREMONT, CA: The Biden administration has determined that a global semiconductor shortage will last at least through the second half of 2022, putting a long-term strain on a variety of American firms, including automakers and the consumer electronics industry. Commerce Secretary Gina Raimondo said Tuesday, 25 January, that the US government intends to investigate reports of possible price gouging for chips used by vehicle and medical device manufacturers. Raimondo said in a press conference with reporters on Tuesday, discussing the conclusions of an industry analysis her organization completed, that they are not even close to being out of the woods in terms of semiconductor supply concerns.
There is a significant, continuous difference in supply and demand for semiconductors, according to the analysis, which is based on data from more than 150 companies in the chip supply chain. According to the report, the corporations do not expect the problem to be resolved in the next six months. The Commerce Department study emphasizes the Biden administration's limited options in dealing with the problem, which has resulted in electronic gadget production delays and car industry furloughs. The chip shortfall is also a major contributor to increased inflation, which has bedeviled President Joe Biden's administration and threatens to help Republicans retake Congress in November's midterm elections.
Raimondo stated that the median inventory has decreased from 40 days to less than 5 days, leaving no room for error. Any disruption for overseas producers, such as a Covid pandemic or a weather-related event, could result in production halts and furloughs in the United States. Despite monthly efforts made by the Biden administration to alleviate shortages, the semiconductor supply chain remains weak, according to the report. The majority of industry executives have warned that the shortage will not stop until the second half of this year, with some products being delayed until 2023 due to a scarcity of parts. While the industry's roller-coaster nature may never be able to escape, the present demand boom could extend until 2025.