Chip manufacture
If you’re expecting the global chip shortage to ease within the year, it’s looking a bit difficult at the moment. According to Bloomberg and The Washington Post, the U.S. Department of Commerce released a report on the state of the semiconductor supply chain after obtaining supply chain information from major semiconductor companies and interviewing a number of related industries, stating that global shortages will At least until the second half of 2022. Commerce Minister Gina Raimondo bluntly stated that “we are far from getting out of the woods”.
According to the report, the median inventory of downstream manufacturers purchasing chips in the United States has dropped from 40 days in 2019 to only 5 days now. This has greatly reduced US companies’ tolerance for supply chain risks, and even small fluctuations in the arrival time (such as being stuck in a port for a week) can bring production to a standstill. The most affected are broadband equipment production companies, car dealers and medical device manufacturers. According to the investigation by the Ministry of Commerce, there is no situation where there is a shortage of goods. It is simply because of the increase in demand that production cannot keep up. Compared with two years ago, the median demand for wafers from downstream manufacturers has increased by about 17%.
The Commerce Department concluded that the government cannot directly do anything to end the chip shortage, and can only rely on private companies to increase production through market mechanisms and optimize the supply chain to meet the challenge. Of course, Raimondo will not miss this opportunity to sell the US$52 billion industrial subsidies announced by US President Biden, but even if he starts to increase local production capacity now, it will take a few years for it to be effective.
