Global chip shortage will ‘run deep into 2023’, say US officials

The global semiconductor shortage shows no signs of slowing down soon, according to US officials.

The chip shortage caused by Covid-related supply chain disruptions; the increase in demand that followed the move to remote working, and the ongoing trade war between the US and China is currently affecting many industries that rely on the technology.

"I do not, unfortunately, see the chip shortage abating in any meaningful way any time in the next year," said Raimondo.

The US Commerce Secretary has recently been on a trip to South Korea, where she convened a dozen CEOs, including leaders of chipmakers. The country is one of the leading producers of semiconductors. Although Taiwan, home to chip manufacturing giant TSMC, accounted for over 60 per cent of global foundry revenues in 2020, South Korea followed with 18 per cent of global foundry revenues.

Reflecting on her trip, Raimondo said that she discussed the shortage with experts "and they all agreed that [it will be] deep into 2023, possibly early '24, before we see any real relief."

She repeated her call for Congress to act to provide funding for legislation that aims to stimulate domestic manufacturing of the computer chips that are key to a wide array of products, from smartphones to medical equipment to vacuum cleaners.

Since the shortage began in 2020, the economic losses caused by the lack of semiconductors can be measured in billions of dollars.

Affected industries include carmakers, healthcare providers and telecom operators. As a result of the difficulties in acquiring chips, Apple had to slash its production targets for the iPhone 13 by as many as 10 million units and carmakers including Ford, Jaguar Land Rover, Volkswagen, General Motors, Nissan, Daimler, BMW, Renault and Toyota were forced to shut factories, scale back production or exclude high-end features that relied on semiconductors, such as integrated satellite navigation systems.

"We are really on borrowed time," Raimondo said. "Every other country has subsidies on the table now and if Congress doesn't act very quickly," she warned, key producers like Samsung, Intel and Micron "are going to build in another country and that be that would be hugely problematic."

The US Senate and the House of Representatives have each approved a pair of $52bn (£42bn) bills: the 'CHIPS Act' and the 'America COMPETES Act' to invest in domestic chip research and manufacturing, but so far have failed to agree on the final form of the legislation.