Chip shortage causes and complications, according to the U.S. government

Intel 12th Gen Hero Corei9 ChipSource: Daniel Rubino / Windows Central

The U.S. Department of Commerce has released its report detailing the findings of the Request for Information (RFI) it kicked off in September 2021. That request caused a bit of a kerfuffle with semiconductor manufacturing giants such as TSMC.

Since then, the key chip players have forked over the info, and the U.S. government has a report to share with the world. It contains a lot of useful information, so you’ll want to scan the whole thing when you get the chance, but in short, it substantiates a few key findings and company claims we’ve reported on throughout the shortage. For example, a 2021 report indicated many Taiwanese companies pinned the shortage blame on Texas Instruments’ inability to ramp up analog chip production, citing it as the root of the semiconductor crisis. And now, the U.S. government has stated that, indeed, a lack of analog chips appears to be one of the biggest contributors to the worldwide situation. Legacy logic and optoelectronics chip shortages are also referenced as being part of the problem.

Here are a few other key findings from the report:

  • Median demand for chips highlighted by buyers was as much as 17% higher in 2021 than 2019, and buyers aren’t seeing commensurate increases in the supply they receive. This is a major supply and demand mismatch.
  • The median inventory of semiconductor products highlighted by buyers has fallen from 40 days in 2019 to less than 5 days in 2021 (see Figure 2). These inventories are even smaller in key industries.
  • The primary bottleneck across the board appears to be wafer production capacity, which requires a longer-term solution.

Commerce Report Chip Shortage Figure

Figure 2.Source: U.S. Department of Commerce
Right there lies the big issue, according to the report: Wafer production isn’t keeping up with demand. For what it’s worth, the big industry players are working overtime to fix that, though solutions involve a lot of planning and development over the course of years.

Again, be sure to check out the U.S. Department of Commerce’s full report for the in-depth scoop on every facet of the RFI findings. Also peruse the expert indications that the chip shortage’s end may be in sight (at least, an end for the worst parts of it).

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