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US Government Worried About Domestic Chip Sector Amidst Chip Shortages

The US Department of Commerce recently released a report named “Request for Information” about the global chip shortage and advised to focus on domestic production. The global chip shortage impacted a number of sectors worldwide and in response to it the US department released a report in September 2021.

Through the report the US Government reached to around 150 firms including nearly all the major chip producers and firms from various consuming industries. The report described the issues that were faced by multiple chip consuming industries. The demand for chips increased due to development of latest state of art electric vehicles and 5G masts.

US Government Worried About Domestic Chip Sector Amidst Chip ShortagesThe pandemic increased the demand further but severely impacted supply chain due to abrupt shutdowns.The report included several faced by the supply chain and the consuming industries. Interestingly, the report also stated that the demand for semiconductor chips was 21% higher than the previous year. But there has been no rise in the supply chain.

The report tried to identify the key bottlenecks impacting the supply chain and reached to a solution that there is need to boost the production capacity. Semiconductor chips come in various types. The report highlighted particular shortages in products. The report altogether stated that need for ramping up chip production in US. Thus US Government is encouraging the domestic chip producers to ramp up the domestic chip making ability.

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