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US Commerce Department Thinks The Global Chip Shortage Isn't Over

Qualcomm Snapdragon 765 5G Chip In Hand 01
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The global chip shortage has decimated multiple industries over the past year. According to the U.S. Commerce Department, the crisis could continue until at least the second half of this year.

The agency published a detailed report on the semiconductor supply chain, covered by The Washington Post and Bloomberg (via Engadget). “We aren’t even close to being out of the woods” with the supply chain issues, Commerce Secretary Gina Raimondo said.

While the issue has hit the tech industry en masse, the report claims it has particularly impacted car manufacturers, broadband providers, and medical device producers. Going into more detail, the report claims the median chip inventory for a client company fell from 40 days in 2019 to less than five days in 2021.

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The Commerce Department said private companies are “best positioned” to tackle the crisis

Meanwhile, the demand was reportedly higher by around 17% last year as compared to 2019. The agency’s report gathered data from a vast number of sources, including all major semiconductor producers, and companies belonging to other sectors.

The agency stressed that disruption of around a week could shut down an entire factory in America. Although there were allegations of hoarding, the report found no evidence to suggest that hoarding led to the current supply chain problems.

Lastly, the Commerce Department concludes that the U.S. government isn’t in a position to end the shortage. Instead, the agency said private manufacturers are “best positioned” to tackle the issue by developing efficient designs, increasing production, and reducing the impact they have on their respective supply chains.

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It’s clear at this point that the supply chain crisis won’t abate with the efforts of one company alone. To make matters worse, governments and major corporations have proven powerless in this regard so far.

Arm CEO Simon Segars said in November that the chip shortage could stretch until the end of 2022. Segars deemed this the “the most extreme” supply chain shortage he’d ever seen. He went on to say that “just building factories” isn’t going to solve the problem.

The mobile industry has faced many challenges due to semiconductor shortages. Crucially, companies like Samsung and OnePlus postponed the release of their smartphones owing to the chip shortage.

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