A voluntary survey of 150 companies confirmed last fall in the supply chain, a significant, persistent mismatch in supply and demand for chips.
see photosThere is a significant, persistent mismatch in the supply and demand of chips.
The US Commerce Department said on Tuesday that a global survey of semiconductor chip producers and users shows shortages will persist, primarily due to a lack of wafer production capacity. A voluntary survey of 150 companies confirmed last fall in the supply chain “there is a significant, persistent mismatch in supply and demand for chips, and respondents did not see the problem going away over the next six months.”
Commerce Secretary Gina Raimondo told reporters that the department “didn’t really get what we needed in some cases and we’re going to go and do a personal engagement with the company and get what we need.”
Raimondo said in November that it had “spoke to all CEOs across the supply chain — including Samsung, TSMC, SK — and all CEOs promised me they would present to us a robust and complete data flow.”
Some companies in Asia and governments have previously expressed concerns about the data request. Raimondo reiterated that the department can exercise its legal authority to obtain a response.
Taiwan’s Ministry of Economy, responding to the survey, reiterated that Taiwanese companies are working hard to produce chips and are coordinating with “important international business partners” to strengthen supply chains.
“The Ministry of Economic Affairs and our country’s chip manufacturers attach great importance to cooperation with like-minded partners, and will continue to work together to create a secure, reliable and resilient supply chain, which will gradually accelerate the growth of the market. Should be able to reduce demand for the next few years.”
TSMC, Asia’s most valuable listed firm and the largest contract chip maker globally, declined to comment.
The US could compel foreign semiconductor firms with US operations to answer detailed questions about the chips market.
Raimondo on Tuesday declined to say who complied or did not. The department also said it was sharing its findings with foreign governments.
The department said it has noticed some unusually high prices among some of the chips used by automakers and medical device makers.
The department said it would “involve the industry on node-specific problem resolution in the coming weeks. We will also look into claims of unusually high prices in these nodes.”
“The demand for chips is high. It’s getting higher,” Raimondo said, adding that demand is now about 20% above 2019 levels. The survey is “not very good news”, she said.
Raimondo said the survey did not find evidence of hoarding.
The department said the average inventory to consumers for key chips has fallen from 40 days in 2019 to less than 5 days in 2021.
“Five days of inventory. There’s no room for error,” Raimondo said. “It tells you how fragile this supply chain is.”
After the Senate approved the funding in June, sources told Reuters House Democrats expected to introduce legislation aimed at increasing US competitiveness with China and spending $52 billion on semiconductor production and research.
President Joe Biden is pressing Congress to approve more money to boost chip production in the United States as shortages of key components used in autos and computers exacerbate supply chain bottlenecks.
Intel Corp said it planned to invest $20 billion and build two new chip plants in Ohio, while Samsung Electronics has selected Taylor, Texas for a new $17 billion plant to make advanced chips.
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