According to a new survey of more than 150 manufacturing firms by the U.S. Department of Commerce, supplies of semiconductors had fallen from an average of 40 days’ worth in 2019 to just five days in late 2021.
Sales of electronic devices soared during the pandemic, as people were unable to go out and spend on services like usual. This has left semiconductor makers struggling to keep up with demand, as demand was 17% higher than it was in 2019. As a result, there have been huge disruptions for major industries, since millions of products, including cars, washing machines, and smartphones rely on semiconductors.
In a statement regarding the report’s findings, Secretary of Commerce Gina Raimondo said that with “sky-rocketing demand and full utilization of existing manufacturing facilities, it’s clear the only solution to solve this crisis in the long-term is to rebuild our domestic manufacturing capabilities.”
On Thursday, House Democrats unveiled new legislation aimed at increasing American competitiveness with China, which includes spending $52 billion on semiconductor production and research after the Senate approved the funds in June. President Biden’s administration has been pushing Congress to get the funding into law to help boost chip production in the U.S., as shortages of the key components have made already tight supply chain bottlenecks worse.
Still, many chip manufacturers are already picking the U.S. for their new factories. Intel announced their plans last week to invest $20 billion towards building what could become the world’s largest semiconductor facility in Ohio. Samsung also announced last November that it had chosen a site close to the city of Taylor, Texas for its new $17 billion computer chip plant. The plant is expected to be operational by the second half of 2024 and is the South Korean electronics giant’s largest U.S. investment.