U.S. companies only have a few days' supply of semiconductors, government says

The Commerce Department conducted a survey of manufacturers including automakers and medical device makers that found median inventory fell from 40 days of inventory in 2019 to less than 5 days in 2021.

“If a wave of Covid, a natural disaster or political instability were to disrupt a foreign semiconductor factory for even just a few weeks, it could lead to the closure of a manufacturing plant in the United States, endangering American workers and their families," the department said in a statement.

These computer chips are essential for a large number of sectors and products ranging from cars and smartphones to medical equipment and even vacuum cleaners.

“The semiconductor supply chain remains fragile and it is critical that Congress pass funding (to manufacture) computer chips as soon as possible,” Commerce Secretary Gina Raimondo said in the statement.

"With soaring demand and full utilization of existing manufacturing facilities, it is clear that the only solution to solving this long-term crisis is to rebuild our manufacturing capabilities" in the United States, she said. added.

President Joe Biden has proposed investing $52 billion to revitalize the US semiconductor industry.

The Senate adopted this law on innovation and competition last June.

"The administration is working with the House and Senate to finalize this legislation," the White House said last Friday.

“Every day we wait for this funding is a day we fall even further behind”, lamented the Minister of Commerce.

Demand for semiconductors grew 17% in 2021 from 2019, according to Commerce Department data.

The majority of factories are running at over 90% capacity utilization, which means that the ability to supply more computer chips is very limited.

Intel boss Patrick Gelsinger speaks on the issue of semiconductors, with President Joe Biden at his side, January 21, 2022 in Washington SAUL LOEB AFP

The giant Intel announced on Friday a massive investment of 20 billion dollars to produce electronic chips in the United States.

But production won't start until 2025.

© 2022 AFP