Commerce Department warns factories vulnerable to shutdowns due to computer chip shortages
The Commerce Department in a report on Tuesday underscored the seriousness of the computer chip shortage, saying the current supply shortage could lead to manufacturing facility shutdowns if not properly addressed.
The department provided the results of a Request for Information (RFI) survey that provided manufacturers and semiconductor companies with insight into the state of the computer chip supply chain.
“For the semiconductor products that present the greatest challenge to acquire, the median inventory of consumers who responded to the RFI fell from 40 days in 2019 to less than 5 days in 2021,” the department said in a statement. summary of its findings, noting that supply may be further reduced in key industries.
“This means that a disruption overseas, which could shut down a semiconductor plant for 2-3 weeks, has the potential to disable a manufacturing plant and furlough workers in the United States if that plant only has 3-5 days of inventory,” the department said. added.
The Commerce Department noted there was a “major supply-demand mismatch” because companies were not seeing growth in computer chip supply, while median demand could be up to 17% higher in 2021 than it was in 2019.
“The main bottleneck identified is the need for additional manufacturing capacity. Additionally, companies identified materials and assembly, testing and packaging capacity as bottlenecks,” the department noted.
The companies said they had encountered supply chain issues with analog chips, used in devices such as radios; legacy logic chips, used in cars and medical devices; and optoelectronic chips, used for things like switches and sensors.
Commerce Secretary Gina RaimondoGina RaimondoUS and Japan in ‘close consultation’ amid Russian tensions Biden calls Intel’s B investment to build chip factories a tool for economic recovery took the opportunity to push Congress for billions of dollars in funding to tackle semiconductor production.
“The semiconductor supply chain remains fragile and it is critical that Congress pass chip funding as soon as possible,” Raimondo said in a statement. “With soaring demand and full utilization of existing manufacturing facilities, it is clear that the only solution to solving this long-term crisis is to rebuild our domestic manufacturing capabilities.”
“President BidenJoe Biden reporterFox News says Biden called him out after ‘son of a b—-‘ remark Peloton responds after another TV character had a heart attack on one of his Defense and National Security – Pentagon puts 8,500 soldiers on high alert MORE proposed $52 billion to revitalize our national semiconductor industry, and every day we wait for that funding is a day we fall further behind. But if we tackle this problem, we can create good jobs, rebuild American industry and strengthen our supply chains here at home for years to come,” she added.