US Authorities Report Says Chip Shortages Will Proceed into 2022, Provide Chains ‘Fragile’

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The U.S. Division of Commerce has launched the outcomes of a report it commissioned on the scarcity of semiconductors that’s at present roiling many world industries. The TLDR is that this: chip shortages aren’t going to be ending any time quickly. The report relies on enter gathered from over 150 corporations concerned within the semiconductor provide chain, as the federal government sought their concepts on learn how to enhance the present state of affairs. Predictably, the report paints a grim image of an business working at full capability with zero room for rising manufacturing or tolerance for disruptions of any type.

The federal government issued the outcomes of its market examine in weblog kind, highlighting its main findings. Probably the most notable is a giant mismatch between provide and demand for semiconductors. The report states that the present demand for chips is as much as 20 p.c increased than it was in 2019 (median is 17 p.c), with no simple strategies accessible to spice up manufacturing. This has led to the median stock of chips to fall to simply 5 days of provide, whereas it was 40 days. Given these tight constraints, if one thing had been to occur in another country the place the chips are made, comparable to a pure catastrophe or COVID-19 outbreak, it may result in the US factories that want these chips additionally shutting down whereas they look ahead to extra chips to reach. The report additionally notes that the silicon fabs it requested for data reported they had been working at “greater than 90 p.c utilization,” so there may be not a lot room to extend manufacturing within the quick time period, no matter monetary incentives.

This stark bar graph exhibits the disparity in stock in comparison with pre-pandemic instances. (Picture: Dept. of Commerce)

The report states it zeroed in on the industries and particular chips which have been most disrupted by the scarcity, and the industries embody medical gadgets, broadband, and autos. So far as which chips are in dire want, they’re described as “legacy logic chips” and embody the next:

  • Microcontrollers which might be primarily fabricated from legacy logic chips, together with, for instance, at 40, 90, 150, 180, and 250 nm nodes
  • Analog chips together with, for instance, at 40, 130, 160, 180, and 800 nm nodes
  • Optoelectronics chips together with, for instance, at 65, 110, and 180 nm nodes.
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The report identifies the basis explanation for the issue, which is wafer manufacturing capability. It provides there isn’t a short-term answer to extend silicon wafer manufacturing with out constructing new services, which may take years to return on-line. Maybe it’s well timed then that Intel simply introduced a brand new silicon fab in Ohio just a few days in the past, as we reported on beforehand. The power is a primary of its type for the “heartland” of America, as Intel’s different fabs are positioned in Arizona at present. The report mentions Intel’s new fab as a transfer in the appropriate route, however somberly notes it received’t be churning out new chips till 2025 on the earliest, so it won’t assist the present state of affairs. Although the report additionally states, “The personal sector is finest positioned to handle the near-term problem posed by the present scarcity,” it notes the federal government is ready for Congress to fund the U.S. Innovation and Competitors Act, which has $52 billion earmarked for silicon fab growth within the US. The invoice already handed the Senate in June of final yr with bipartisan assist, and has seemingly stalled within the Home of Representatives whereas they attempt to modify the invoice for last passage.

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