The White House has promised to address the global shortage of semiconductors, and President Joe Biden has said it has signed an executive order to conduct a supply chain review, along with the development of a long-term strategy to avoid future shortages via Bloomberg.
The cause of the current shortage is due to a mix of factors: the demand for electronic consumer products such as laptops, due to lifestyle changes caused by the COVID-19 pandemic; slowdown in chip production also caused by the pandemic; a business model in the semiconductor industry that causes most companies to outsource chip production to companies such as Taiwan Semiconductor Manufacturing Company (TSMC) instead of building the parts themselves; and the continuing effects of former President Donald Trump’s trade war with China, which have made it harder for U.S. companies to work with Chinese disk producers.
As a result, companies like Apple, Qualcomm, Sony, and AMD have all been citing shortages over the past few weeks, with effects ranging from component shortages for iPhones to the incredibly hard-to-find nature of PlayStation 5 or AMD’s latest CPUs and GPUs.
But in today’s increasingly connected world, a shortage of semiconductor chips is not only having an impact on traditional technology industries, but also on a wide list of other industries. Numerous car companies, including Volkswagen, Fiat Chrysler and Toyota, have been forced to suspend vehicle production in recent months. And Ford has just announced that it will halt production of its most lucrative F-150 trucks earlier this month following the shortage of chips.
To that end, the Biden administration is reportedly working with businesses and trading partners to try to alleviate some of these issues. And while it’s good to see the US government want to address the issue, the United States’ limited involvement in the manufacture of physical semiconductors makes its real ways of addressing the issue unclear.