US government expects chip shortage to continue – Wel.nl

WASHINGTON (Reuters) – The U.S. Commerce Department expects the global chip shortage to continue in the coming months. The ministry concludes this based on a global survey of semiconductor manufacturers and users.

The survey of 150 companies in the chip supply chain, conducted last fall, confirmed that there is “a significant and continuing mismatch between chip supply and demand,” the ministry said. The companies also believe that the problem will not go away in the next six months. The shortage is mainly caused by limitations in the production capacity of wafers, the thin slices of material from which semiconductors are ultimately made.

In September, the ministry asked companies to fill out questionnaires to get more information about the shortage. Although the request is voluntary, Commerce Secretary Gina Raimondo warned that it could force foreign chip companies operating in the United States to answer the questions.

Investigation

Washington’s request drew criticism in Taiwan and South Korea, where there were fears that companies would be forced to disclose trade secrets. Minister Raimondo recently said she had spoken with “all senior supply chain executives,” including those from Samsung in South Korea and TSMC in Taiwan. The ministry also said it has shared the findings of the investigation with foreign governments.

According to Raimondo, the survey contains “little good news”. “The demand for chips is high and it keeps growing,” the minister said, noting that demand for chips is now about 20% higher than in 2019.

High prices

The investigation further revealed no evidence of chip hoarding. However, the ministry is further investigating some unusually high prices seen for some chips used by car and medical device makers.

Additionally, the average inventory of key chips has fallen from 40 days in 2019 to less than five days in 2021. “Five days of inventory leaves no room for error. It shows how this supply chain is fragile,” Raimondo said.

President Joe Biden has urged Congress to approve more funding to boost chip manufacturing in the United States. The shortage of chips leads to production problems in many sectors.