The U.S. Commerce Department said the chip supply shortage would continue for at least six months

The results of an analysis of the relevant data of major companies in the global semiconductor supply chain released by the US Department of Commerce on January 25 showed that the global semiconductor supply chain is still fragile, and the chip supply shortage will continue for at least 6 months.

Information requested by the U.S. Department of Commerce from more than 150 semiconductor manufacturers, users and intermediaries around the world shows that the median demand for user chips in 2021 increased by about 17% compared with 2019, but the supply did not increase accordingly. At the same time, the capacity utilization rate of most semiconductor production facilities has reached more than 90%, which means that new production facilities must be built to increase chip supply. The data confirms that there is a serious and ongoing mismatch between supply and demand of chips, and the surveyed companies expect that this problem will be difficult to solve in the next 6 months.

The information also shows that the median inventory of key chips has dropped from 40 days in 2019 to less than 5 days in 2021. The Commerce Department said this means that if the COVID-19 pandemic, natural disasters and other factors cause foreign semiconductor factories to stop production for even a few weeks, it may further lead to the shutdown of U.S. manufacturing companies and the temporary dismissal of workers.

Affected by the epidemic and chip supply shortages, many US automakers were forced to stop production or reduce production last year. The U.S. Department of Commerce issued a notice in September last year requiring major companies in the global semiconductor supply chain to provide relevant information within 45 days, including inventory, production capacity, raw material procurement, sales, customer information, etc. According to the information released by the US Department of Commerce on the same day, the surveyed companies believe that the main supply bottleneck of the semiconductor industry is the insufficient capacity of chip factories, and other bottlenecks include the lack of semiconductor raw materials and electronic assembly components.

U.S. Commerce Secretary Raimondo issued a statement on the same day saying that the semiconductor supply chain is still fragile, and the U.S. Congress must approve President Biden's proposed investment of $52 billion to increase domestic chip research and development and manufacturing as soon as possible. She claimed that given the surge in demand for semiconductor products and the full utilization of existing production facilities, the only way to solve the semiconductor supply crisis in the long run is to rebuild domestic manufacturing capacity in the United States.