The U.S. supply of computer chips has fallen to
alarmingly low levels, raising the prospect of
factory shutdowns, the Commerce Department
reported this week.
Companies that use semiconductors are down
to less than ive days of inventory — a sharp
drop from 40 days in 2019, according to a
department survey of 150 companies. The chips
used in the production of automobiles and
medical devices are especially scarce.
Demand for chips, the department said, was up
17% last year from 2019.
Citing the results, the Biden administration
called on Congress to pass stalled legislation
that would provide $52 billion for domestic
semiconductor production.
“The semiconductor supply chain remains
fragile, and it is essential that Congress pass chips
funding as soon as possible,” Commerce Secretary
Gina Raimondo said in a statement. “With sky-
rocketing demand and full utilization of existing
manufacturing facilities, it’s clear the only solution
to solve this crisis in the long-term is to rebuild
our domestic manufacturing capabilities.”
Chip shortages have disrupted auto production
and driven up car prices, contributing
signiicantly to a 7% year-over-year increase
in consumer prices last month — the hottest
inlation in four decades. Still, it would take years
for semiconductor factories to begin operation.