The Commerce Department report highlights the biden administration's limited options for responding to the crisis that has led to delays in the production of electronic equipment and forced work-time sabbaticals for the auto industry. Chip shortages are also a key factor driving inflation, upset not only by the White House, but also by the outcome of the November midterm elections.
Most industry executives have previously warned that chip shortages won't ease until the second half of the year, with production of some products delayed until 2023 due to component shortages. While the industry may never be able to shake off the roller coaster nature, the current boom in demand is likely to continue into 2025.
The chip shortage has the impact of the disruption of the global supply chain industry chain caused by the new crown virus. But the main thing is that demand is too strong, and it is difficult for supply to expand in the short term. Because the global chip manufacturers' production capacity is placed there. A set of data analyzed by the U.S. Department of Commerce is telling. Information 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 contradiction between supply and demand is so prominent that it is destined to have a difficult impact on the future in the short term.
Chip shortage has the biggest impact on the U.S. economy! The U.S. government is in a hurry, the Wall Street bigwigs are impatient, and the Fed is impatient. Chip shortages affect a lot of industries, which directly affect three major industries: the automotive industry, the smartphone industry, and medical device manufacturing companies. The United States is known as the country on wheels, which is enough to see how important the automobile industry is to the United States. After the traditional GM, Ford and Chrysler were competed by Japan and Europe, Musk's Tesla electric car actually appeared on the scene, pulling the United States back to the leader of new energy vehicles. If the chip shortage continues, it will pose a big threat to Tesla's electric vehicle production capacity. Musk expressed extreme concern last year.
In the mobile phone market, the United States Motorola once how invincible in the world, and then was crushed by Nokia, and then Jobs actually stood up to get an Apple smart phone and got the Internet to the mobile phone, the mobile Internet turned out, bringing revolutionary changes in the global industry. Once the chip shortage continues, American mobile phone manufacturers will bear the brunt.
Therefore, the chip shortage is difficult to alleviate, and the US government, especially the US Department of Commerce, is more anxious than anyone. This is the reason why the US Department of Commerce issued the warning, and it is also a kind of internalized overflowing psychological reaction of fear and worry!
At the same time, chip shortages have led to higher domestic inflation in the United States. Smartphones with the highest dependence on chips belong to consumer electronics, and adequate supply plays a large role in returning excess money in circulation. Once the supply cannot keep up because the chip is difficult to supply, the high inflation in the United States will undoubtedly be worse.
The United States' response to high inflation currently relies mainly on the Federal Reserve to tighten monetary policy and vigorously withdraw liquidity from the market. However, the root cause is to expand the supply of consumer goods market, and expanding the production of consumer goods including smart phones is the best choice. It has expanded production, developed the economy, increased employment, and suppressed inflation.
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.