According to a study released Tuesday by the Commerce Department, the supply of computer chips in the United States has plummeted to dangerously low levels, heightening the possibility of manufacturing closures.
According to a department study of 150 firms, companies that employ semiconductors have reduced their inventory to fewer than five days, significantly reducing the previous year’s figure by 40 days. In particular, semiconductors used in autos and medical equipment are becoming rare.
According to the department, the demand for chips increased by 17 percent over the previous year.
Following the release of the data, the Biden administration urged members of Congress to adopt long-stalled legislation that would fund $52 billion for domestic semiconductor manufacturing.
Deputy Secretary of Commerce Gina Raimondo stated in a statement that “the semiconductor supply chain continues to be fragile, and Congress must enact chips funding as quickly as possible.”
“Given the skyrocketing demand and full utilization of current production facilities, it is evident that the only long-term answer to this dilemma is to develop our domestic manufacturing capacity,” says the president.
Because of chip shortages, vehicle manufacturing has been hampered, and automobile costs have risen, adding largely to a 7 percent year-over-year increase in consumer prices last month, the highest inflation rate in more than four decades. It would still take years before microchip manufacturing could commence production.
A high-speed internet event held in the Eisenhower Executive Office Building’s South Court Auditorium at the White House in Washington, D.C., on June 3, 2021, was addressed by U.S. Secretary of Commerce Gina Raimondo in Washington, D.C.