The manufacturers have seen their stocks of semiconductors plunge amid the global chip shortage; the US Department of Commerce has warned. As per a survey of more than 150 firms, supplies had fallen from an average of 40 days’ worth in 2019 to just five days in late 2021.
Sales of devices soared during the pandemic, leaving semiconductor makers struggling to keep up with demand.
The shortage has resulted in huge disruptions for major industries. Millions of products – cars, washing machines, smartphones and more-rely on these chips, also known as semiconductors. Demand for chips, the department said, was up 17% last year from 2019.
Key Findings from the Semiconductor RFI
- Demand for semiconductors is as much as 17 percent higher in 2021 than it was in 2019, and consumers aren’t seeing commensurate increases in the available supply.
- The majority of semiconductor manufacturing facilities are operating at or above 90 percent utilization, meaning there is limited additional supply to bring online without building new facilities.
- Bottlenecks are most concentrated in a specific semiconductor inputs and applications, including legacy logic chips (used in automobiles, medical devices, and other products), analog chips (used in power management, image sensors, and radio frequency), and optoelectronics chips (including for sensors and switches).
- The main bottleneck that respondents identified is the need for additional fab capacity. Additional bottlenecks that respondents identified include a lack of raw material inputs for both semiconductors and the other components paired with semiconductors to assemble sub-parts for electric devices.
The RFI asked all parts of the semiconductor supply chain – producers, consumers, and intermediaries – to voluntarily share information about inventories, demand, and delivery dynamics. With Secretary Raimondo’s engagement, more than 150 responses from the world responded to the RFI.
“The semiconductor supply chain remains fragile, and it is essential that Congress pass chip funding as soon as possible,” said Secretary of Commerce Gina M. Raimondo. “With sky-rocketing demand and full utilization of existing manufacturing facilities, it’s clear the only solution to solve this crisis in the long-term is to rebuild our domestic manufacturing capabilities. President Biden has proposed $52 billion to revitalize our domestic semiconductor industry, and every day we wait on this funding is a day we fall further behind. But if we address this problem, we can create good jobs, rebuild American manufacturing, and strengthen our supply chains here at home for years ahead.”
The research also found that demand for semiconductors was as much as 17% higher last year than it was in 2019.
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