{"id":6795,"date":"2022-01-26T13:01:10","date_gmt":"2022-01-26T13:01:10","guid":{"rendered":"https:\/\/mailinvest.blog\/index.php\/2022\/01\/26\/us-government-report-says-chip-shortages-will-continue-into-2022-supply-chains-fragile\/"},"modified":"2022-01-26T13:01:10","modified_gmt":"2022-01-26T13:01:10","slug":"us-government-report-says-chip-shortages-will-continue-into-2022-supply-chains-fragile","status":"publish","type":"post","link":"https:\/\/mailinvest.blog\/index.php\/2022\/01\/26\/us-government-report-says-chip-shortages-will-continue-into-2022-supply-chains-fragile\/","title":{"rendered":"US Government Report Says Chip Shortages Will Continue into 2022, Supply Chains ‘Fragile’"},"content":{"rendered":"

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The U.S. Department of Commerce has released the results of a report it commissioned on the shortage of semiconductors that is currently roiling many global industries. The TLDR is this: it\u2019s not going to be ending any time soon. The report is based on input gathered from over 150 companies involved in the semiconductor supply chain, as the government sought their ideas on how to improve the current situation. Predictably, the report paints a grim picture of an industry running at full capacity with zero room for increasing production or tolerance for disruptions of any kind.<\/p>\n

The government issued the results of its market study in blog form<\/a>, highlighting its major findings. The most notable is a big mismatch between supply and demand for semiconductors. The report states that the current demand for chips is up to 20 percent higher than it was in 2019 (median is 17 percent), with no easy methods available to boost production. This has led to the median inventory of chips to fall to just five days of supply, whereas it used to be 40 days. Given these tight constraints, if something were to happen in a foreign country where the chips are made, such as a natural disaster or COVID-19 outbreak, it could lead to the US factories that need those chips also shutting down while they wait for more chips to arrive. The report also notes that the silicon fabs it asked for information reported they were running at \u201cmore than 90 percent utilization,\u201d so there is not much room to increase production in the short term, regardless of financial incentives.<\/p>\n

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This stark bar graph shows the disparity in inventory compared to pre-pandemic times. (Image: Dept. of Commerce)<\/p>\n<\/div>\n

The report<\/a> states it zeroed in on the industries and specific chips that have been most disrupted by the shortage, and the industries include medical devices, broadband, and autos. As far as which chips are in dire need, they are described as \u201clegacy logic chips\u201d and include the following:<\/p>\n