The US Commerce Department says the global chip shortage will stretch into at least H2 2022, based on information from 150+ companies in the chip supply chain
Bloomberg
Context & Ripple Effects
The Commerce Department’s supply-chain readout reinforces forecasts from Intel, Nvidia, and TSMC that the shortage would run through 2022, following their earlier warning of a prolonged chip shortfall. It also follows a period in which buyers faced 22-week chip wait times, making the official assessment consequential for manufacturers’ production planning.
Flex had already projected constraints through mid- to late 2022; the Commerce Department’s survey broadens that concern from one major electronics manufacturer to more than 150 supply-chain companies.
First-order effects
Electronics manufacturers and their customers must plan for component availability to remain a production constraint into the second half of 2022 rather than treat the disruption as near-term.
The Commerce Department gains a broader evidence base for describing the shortage as supply-chain-wide, rather than relying on forecasts from individual chipmakers or assemblers.
Second-order effects
Intel, Nvidia, TSMC, and manufacturers such as Flex face continued pressure to prioritize limited supply among customers as long lead times persist.
Buyers seeking chips have less basis to expect a quick normalization after the earlier surge in sourcing wait times, strengthening the value of committed supply arrangements and alternative sourcing.
Third-order effects
A shortage extending across successive forecasts makes semiconductor availability a planning input for electronics products, not merely a procurement exception.
If the pattern continues, chip supply relationships are likely to become more contractual and diversified as manufacturers seek to reduce exposure to a single constrained channel.
The trend: The episode belongs to a contracted semiconductor cycle in which capacity responds more slowly than demand and turns chip access into a product constraint.
It's alarming, really, the situation we're in as a country, and how urgently we need to move to increase our domestic capacity in making chips. https://www.nytimes.com/...
In an interview with The New York Times, Gina Raimondo, the commerce secretary, said that the U.S. is facing an “alarming” shortage of semiconductors that is threatening American factory production and helping to fuel inflation. https://www.nytimes.com/...
Demand for semiconductor chips is skyrocketing. Suppliers can't keep up. This is a huge threat to the US economy. The House needs to act NOW & pass strong funding for domestic chip manufacturing. https://twitter.com/...
Secretary Raimondo is right—the chips shortage is only going to get worse until we pass the China competition bill, which will boost Intel's investment in semiconductor manufacturing in Ohio. https://twitter.com/...
Today, we received findings from our request for information on semiconductors that confirms the urgent economic & national security need for Congress to pass USICA, which includes $52B to incentivize making chips in America. Learn more: https://www.commerce.gov/... https://twitt…
Semiconductors play a vital role in our economic & national security. We must ensure they are made in America. The findings from the RFI we issued are a step forward in bringing transparency around inventory, orders, & bottlenecks in the supply chain. https://www.commerce.gov/...
Supply chain problems are not going anywhere, and with that costs pressure on prices. Monetary policy can't do much about that https://www.washingtonpost.com/ ...
One of the best ways to address semiconductor shortages is to pass USICA & CHIPS funding, which will invest billions in research & development to support semiconductor production. I will continue working with @WhiteHouse, @SenSchumer & @SpeakerPelosi to get this done. https://twi…
“Manufacturers and other buyers of computer chips had less than five days' supply of some chips on hand late last year.” “Median demand for chips among buyers that responded to the survey was as much as 17 percent higher in 2021 than 2019” https://www.washingtonpost.com/ ...
We aren't even close to being out of the woods as it relates to the supply problems with semiconductors. The semiconductor supply chain is very fragile, and it is going to remain that way until we can increase chip production. https://www.wsj.com/...
On the one hand, we don't have enough chips for products in a number of key industries. On the other, Texas' bitcoin mines are the envy of northern Kosovo. https://twitter.com/...
Today, @CommerceGov released the results from the Risks in the Semiconductor Supply Chain Request for Information (RFI) issued in Sept. 2021. Key findings from the report provided data-driven information about the depths of the semiconductor shortage. https://www.commerce.gov/...
The COVID pandemic created short supply and high demand across many industries, including semiconductors. Read @SecRaimondo's announcement on the Results of the RFI on the Semiconductor Supply Chain https://www.commerce.gov/...
The Biden administration has concluded that the global semiconductor shortage will continue until at least the second half of this year, @jendeben and @ianmking report. And U.S. officials plan to investigate possible price gouging in the chips market. https://www.bloomberg.com/..…
@jendeben @ianmking Chip inventory has fallen from 40 days to 5 days. “That, to me, is the data point that tells you how fragile this supply chain is: Five days of inventory, no room for error,” @SecRaimondo said. https://www.bloomberg.com/...
The Biden administration officially concluded what analysts have been saying: The chip shortage will persist through the second half of 2022. “The supply chain is very fragile and will remain that way” until there's more U.S. production, @SecRaimondo says. https://www.bloomberg.c…
The Commerce report didn't find any hoarding (which was believed to contribute to the shortage) but said end users in the auto and medical devices sectors saw “unusually high prices.” @SecRaimondo said her agency will look into brokers that appear responsible here. https://twitte…