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The White House has pledged to help address the current global semiconductor shortage, with President Joe Biden announcing he has signed an executive order to conduct a supply chain review and develop a long-term strategy for avoid future shortages, via Bloomberg.
The cause of the current shortage is due to a mix of factors: spikes in demand for consumer electronics such as laptops due to lifestyle changes caused by the COVID-19 pandemic; the slowdowns in flea production also caused by the pandemic; a business model in the semiconductor industry that sees most companies outsource chip production to companies like Taiwan Semiconductor Manufacturing Company (TSMC) instead of manufacturing the parts themselves; and the lingering effects of former President Donald Trump’s trade war with China that made it harder for US companies to work with Chinese chip makers.
The upshot is that companies like Apple, Qualcomm, Sony and AMD have all reported shortages in recent weeks, with effects ranging from the shortage of iPhone parts to the incredibly hard-to-find nature of the PlayStation 5 or PCs. latest processors and GPUs from AMD.
But in today’s increasingly connected world, a shortage of semiconductor chips is affecting not only traditional tech industries, but a huge list of other industries as well. Many auto companies – including Volkswagen, Fiat Chrysler and Toyota – have been forced to temporarily halt vehicle production in recent months. And Ford just announced it would halt manufacturing of its most lucrative F-150 trucks earlier this month following a chip shortage.
To that end, the Biden administration would work with companies and business partners to try to alleviate some of these problems. And while it’s good to see the US government looking to tackle the problem, the limited US involvement in the manufacture of physical semiconductors makes its actual avenues for solving the problem unclear.
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