White House expects global chip shortage to last at least another 6 months

Half-empty parking lot of cars.
(Image credit: Justin Sullivan/Getty Images)

The White House expects the current global semiconductor shortage hampering automobile, medical device, and consumer electronics supply chains to continue through at least the second half of 2022, Bloomberg reports.

"We aren't even close to being out of the woods as it relates to the supply problems with semiconductors," said Commerce Secretary Gina Raimondo discussing an industry report her agency released Tuesday. The report says "there is a significant, persistent mismatch in supply and demand for chips." And according to the over 150 companies surveyed, the problem is unlikely to be resolved in the next six months.

What's more, Raimondo said "median inventory has fallen from 40 days to fewer than 5 days, resulting in no room for error," Bloomberg writes. Any sort of COVID or weather-related disruption to overseas manufacturers could portend shutdowns and furloughs in America.

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"The semiconductor supply chain remains fragile," the report said. "Demand continues to far outstrip supply." The Biden administration has been trying to ease tensions for months to no avail; meanwhile and relatedly, high inflation has persisted, threatening Democratic gains during 2022's midterm elections.

In the report, the Commerce Department notes the private sector to be "best positioned to address the near-term challenge posed by the current shortage, via increased production, supply-chain management to minimize disruption, and product design to optimize the use of semiconductors." Raimondo adds, however, that the report shows the need for more investment in domestic manufacturing, which would involve rescuing stalled legislation from Capitol Hill.

"Congress must act," Raimondo said.

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