Commerce Department says the chip shortage isn’t going away, but it’s proactively looking for answers

Photo (c) mikroman6 - Getty Images

Both Congress and industry are chipping in to help, too

The semiconductor chip shortage that first ravaged the automotive industry and grew to touch a variety of things that consumers buy – smartphones, game consoles, computers, home appliances – isn’t going away, says the U.S. Commerce Department.

On Tuesday, the agency stated that it is looking high and wide for viable chip producers. Unfortunately, it has come up empty so far. That means consumers will have to sit and wait until production improves, which could take as long as six months.

That left Commerce Secretary Gina Raimondo with little choice but to take the issue head-on to look for an answer. She said chipmakers “didn't really get what we needed" in some instances and that her agency is "going to go company by company and do personal engagement and get what we need." To satisfy that goal, Raimondo said she’s spoken to "all of the CEOs in the supply chain – including Samsung -- and all of the CEOs have pledged to me that they will be submitting robust and complete data flows to us."

Raimondo said there’s no evidence of other countries hoarding chips, but the U.S. is essentially stuck in the mud. The available chip inventory for consumer products has plummeted from 40 days in 2019 to less than 5 days in 2021.

"Five days of inventory. No room for error," Raimondo said. "That tells you how fragile this supply chain is."

Congress is also working towards a solution

Not wanting to frustrate consumers any longer, both the Senate and House of Representatives stepped up to do their part in triaging the situation. The House’s move came in the way of the “America Competes Act of 2022” – a.k.a. the ‘‘America Creating Opportunities for Manufacturing, Pre-Eminence in Technology, and Economic Strength Act of 2022.”

The proposed legislation's primary goal is to create incentives to produce semiconductor chips. It also puts great weight behind what it calls “supply chain resilience,” which it hopes will counter threats to supply chains such as the country’s dependence on China for chips.

President Biden hammered that independence home in comments about Congress' efforts, saying the proposed legislation “will make our supply chains stronger and reinvigorate the innovation engine of our economy to outcompete China and the rest of the world for decades to come.”

On the business side of the equation, Intel also announced plans for an initial investment of more than $20 billion in building two new chip factories in Ohio. Having also suffered through the chip shortage, General Motors thinks it might have a solution to its problem. The automaker said it’s partnering with seven chip supplier partners to design chips that handle more processes than the current chips, and are made in North America.

At a recent industry conference, GM president Mark Reuss said his company and its chip partners are already trying out several families of microcontrollers that will lower the number of chips by 95% on cars and trucks.

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