The White House has pledged to help resolve the current global semiconductor shortages, with President Joe Biden claiming to be signing an executive order to conduct a supply chain review along with developing a long-term strategy to avoid future shortages, 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; slowdown in chip 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 building their own parts; and the persistent effects of former President Donald Trump’s trade war with China, which has made it more difficult for American companies to work with Chinese chip producers.
The result is that companies like Apple, Qualcomm, Sony and AMD have cited shortages in recent weeks, with effects ranging from the shortage of parts for iPhones to the incredibly hard-to-find nature of the PlayStation 5 or AMD’s newest CPUs and GPUs. .
But in today’s increasingly connected world, the scarcity of semiconductor chips impacts not only traditional technology sectors, but also a wide list of other sectors. Numerous automotive companies – including Volkswagen, Fiat Chrysler and Toyota – have been forced to temporarily suspend vehicle production in recent months. And Ford has just announced that it will stop manufacturing its most profitable F-150 trucks earlier this month due to chip shortages.
To this end, the Biden government is reportedly working with companies and business partners to try to alleviate some of these problems. And while it is good to see the U.S. government trying to solve the problem, the limited involvement of the United States in the manufacture of physical semiconductors makes its real ways of solving the problem unclear.