Happy Nice Mall

WASHINGTON — The United States is facing an “alarming” shortage of semiconductors, according to a government survey of more than 150 companies that make and buy chips; the situation threatens American factory production and fuel inflationCommerce secretary Gina M. Raimondo said in an interview on Monday.

He said the findings showed a critical need to support domestic production and urged Congress to pass it. Legislation aimed at increasing US competitiveness with China by enabling more American production.

“The situation we are in as a country and how urgently we need to act to increase our local capacity is really worrying,” Ms Raimondo said.

The findings show that demand for chips that power cars, electronics, medical devices and other products is far outstripping supply, even as global chipmakers approach their maximum production capacity.

Demand for semiconductors increased by 17 percent from 2019 to 2021, while there was no proportional increase in supply. According to data compiled by the Commerce Department, the vast majority of semiconductor manufacturing plants use about 90 percent of their capacity to produce chips, meaning they have little ability to ramp up their production immediately.

The need for chips is expected to increase with the proliferation of technologies that use large amounts of semiconductors, such as 5G and electric vehicles.

The combination of rising demand for chip-containing consumer products and pandemic-induced disruptions in production has led to shortages and skyrocketing prices for semiconductors over the past two years.

The shortage of sawdust has strained some factories that rely on the components to make their products. American auto manufacturers, to slow down or suspend production. has stifled US economic growth and led to high car prices, a big driver rising inflation in the United States. The price of a used car has increased 37 percent last year, and raise inflation to a 40-year high in December.

In September, the Department of Commerce sent out an information request to global chip manufacturers and consumers to gather information on inventories, production capacity and backlogs to understand where industry bottlenecks lie and how they can be alleviated.

This the results of that surveyThe Commerce Department released Tuesday morning reveals just how scarce the global chip supply has become.

The median inventory among buyers fell from the 40 pre-pandemic days to less than five days; This means that any hiccups in chip production, for example, due to a winter storm or another coronavirus outbreak, could cause famines that will shut US factories, and once again, Ms Raimondo said it has destabilized supply chains again.

“We have no room for error,” he added.

Biden administration officials have united behind a broadening law passed by the Senate in June as a response to the nation’s supply chain problems, to help resolve the issue.

Known in the Senate as the U.S. Innovation and Competition Act, the bill would pour nearly a quarter trillion dollars into scientific research and development to boost its competitiveness against China and support semiconductor manufacturers by providing $52 billion in emergency subsidies.

The momentum in legislation stalled due to ideological disagreements between the House and Senate over how to channel funding. Parliamentarians in June passed its own narrower billIt avoids the Senate’s focus on technology development to fund basic research.

However, administration officials led by Ms. Raimondo began to provoke lawmakers behind the scenes to help bridge their differences to pass the bill quickly, emphasizing the urgency of swiftly turning the solutions into law.

“There’s no getting around it. There is no other solution,” said Miss Raimondo. “We need more facilities”

The Commerce Department’s research found that in some cases it took companies twice as long to procure certain sought-after chips, sometimes as much as a year. Survey respondents also said they did not see the industry’s supply-demand mismatch dissipate in the next six months.

The shortages have affected the most advanced chips needed to power technologies such as artificial intelligence, as well as larger legacy chips needed for automated manufacturing.

Ms Raimondo said she spent “too much time” talking about the shortfall to senior executives around the world, some of whom began personally hunting around the world for the small number of chips crucial to supply chains.

He added that the survey revealed to an alarming degree how dependent the US is on Taiwan for the most advanced chips. Taiwan Semiconductor Manufacturing Company has become the contract manufacturer of choice for many companies that can design their chips in the United States but turn to Asia to manufacture them.

China views its claim on Taiwan as non-negotiable and is taking an increasingly aggressive military stance towards the island. Putting the US’s advanced chip supply at risk.

In a briefing with reporters on Tuesday, Ms. Raimondo said the survey revealed unusually high prices for semiconductors sold through brokers, and the Commerce Department will investigate these practices.

The Biden administration has set up an early warning system to notify the government and industry of the impending chip shortage and has brought together company leaders to try to address the problem, among other actions. While also welcoming the industry investment, he acknowledged that construction of any new chip manufacturing plant in the United States would take several years and would not provide an immediate remedy to famines.

on Friday, Intel announced will invest $20 billion at a facility in Ohiowill include two chip factories and directly employ 3,000 people. Intel said construction of the first two factories is expected to begin this year, but production won’t begin until 2025.