Chip Armageddon Reveals How Terrifyingly Fragile the U.S. Supply Chain Actually Is

Jan 27, 2022

https://liquidity-provider.com/app/uploads/2022/01/dizajn-bez-nazvaniya-2022-01-28t172637.238.png

In 2021, the supply-chain problem was severe, but we had no idea how severe. It was actually a five-days-from-emergency kind of bad.

According to a new report issued Tuesday by the Department of Commerce, the average inventory of semiconductor chips has decreased from 40 days in 2019 to less than five days in 2021. Certain critical industries were particularly strained.

This has a significant influence on manufacturers of automobiles, consumer electronics, LED lighting, and even wind turbines. For example, the global car sector would lose around $210 billion in sales in 2021 as a result of a global semiconductor shortage that led corporations to reduce output. Additionally, the chip scarcity increased inflation since both new and old automobiles were prohibitively costly, as automakers require chips to manufacture new vehicles. In December, the price of new vehicles and trucks increased by an astounding 11.8 percent year over year.

Tuesday's study is based on replies from more than 150 organizations to a September Request for Information from Commerce, which requested data on inventory, demand, and delivery trends from anybody involved in the semiconductor supply chain.

"That means that if a COVID epidemic, a natural disaster, or political instability interrupts a foreign semiconductor factory for even a few weeks, it has the potential to close a manufacturing plant in the United States, endangering American employees and their families," Commerce warned Tuesday.

Not only were firms working with extremely tight inventories, but demand for semiconductors was at least 20% greater last year than in 2019. Industry analysts anticipate that the chip scarcity will last till 2022.

Due to the semiconductor industry's persistent vulnerability and the supply chains that support it, Commerce Secretary Gina Raimondo has urged Congress to approve the CHIPS for America Act. The plan, which cleared the Senate last summer, would offer $52 billion in subsidies to assist semiconductor businesses in establishing manufacturing operations in the United States.

"The semiconductor supply chain is unstable, and Congress must act swiftly to support CHIPS," Raimondo said in a statement Tuesday.

Raimondo is not alone in this regard. The Biden administration has supported the plan, and almost 60 CEOs of large corporations—including Apple, Microsoft, Alphabet, Toyota Motor North America, and Verizon—sent an open letter to the United States House of Representatives last month pushing it to adopt the CHIPS Act. "The chip scarcity threatens the whole economy, and time is running out," the CEOs warned.

According to the White House, the United States currently produces less than 12% of the world's semiconductors. That may change, though, if more corporations follow Intel's path. The technology behemoth said this week that it would invest $20 billion in Ohio to establish chip-making facilities. Intel anticipates that the New Albany facilities will be operational by 2025.

Intel CEO Pat Gelsinger stated Friday that the CHIPS Act was a factor in the company's decision to proceed with the Ohio facility. "Now Congress must complete the task," he stated.

However, the measure is not without detractors. Senator Bernie Sanders argued in November that the proposal amounted to encouraging bad conduct, stating in a floor address that chipmakers have the financial means to construct the required facilities.

Nonetheless, proponents such as Raimondo argue that boosting US chip manufacturing capability is the prudent course of action. "With demand skyrocketing and existing production capacity fully used, it is evident that the only long-term answer to this dilemma is to strengthen our domestic manufacturing capabilities," she stated.

Subscribe Our Newsletter

Twitter's Move to Charge for Basic Security Raises Hackles Among Users

Alexander

Twitter’s Move to Charge for Basic Security Raises Hackles Among Users

Features keep changing on Twitter since Elon Musk acquired it, and users are angry about the new security updates.

Companies
Asian Tech Rout Worsens as China Index Closes Near Record Low
Asian Tech Rout Worsens as China Index Closes Near Record Low

On Tuesday, investor worries of rising interest rates fueled a global selloff in technology equities, with a Hong Kong benchmark tracking Chinese technology companies ending near a record low.

Stocks
Oliver

How to Provide Liquidity to Cryptocurrency Exchange?
Cryptocurrency is already changing the face of trading. Due to the greater demand for crypto assets, new exchanges are hitting the market with promised convenience and features. However, every cryptocurrency exchange requires liquidity.

discover
Top 6 Forex License Providers

Liquidity Provider

Top 6 Forex License Providers

Forex brokers are quite popular in the market today, but without a forex license, broker organizations are not legally permitted to conduct traders' transactions.

Forex Business

Contact Us

Contact the Liquidity Provider
for any questions and advertising inquiries b2broker

    Please fill out this contact form to get in touch with us

    / 3000

    By clicking “Get in touch” button, you agree to the privacy policy

    Successful!
    Thank you for your request.
    We will contact you shortly.
    Close

    Alexander

    Is IUL a Good Investment Strategy? — A Guide for Beginner Investors

    Is IUL a Good Investment Strategy?

    Alexander

    Are Crypto Wallets Safe? — Tips to Ensure Maximum Protection of Your Digital Assets.

    Tips to Ensure Maximum Protection of Your Digital Assets

    Alexander

    Roth IRA Guide: What It Is and What You Need to Know.

    Roth IRA Guide: What It Is and What You Need to Know

    Alexander

    From Gold to Index Funds and Crypto: Where to Invest in 2023 for Long Term?

    From Gold to Index Funds and Crypto: Where to Invest in 2023

    Alexander

    Understanding Algorithmic Trading: A Guide for Beginners

    Understanding Algorithmic Trading: A Guide

    Alexander

    Stop Vs. Stop-Limit Order: How Do They Differ?

    Stop Vs. Stop-Limit Order: How Do They Differ

    Alexander

    Invest in the Intelligent Future: The Best AI Stock Market Leaders of 2023

    Invest in the Intelligent Future: The Best AI Stock Market Leaders of 2023

    Deborah Middleton

    How MEC Rules Can Impact Your Life Insurance Policy

    How MEC Rules Can Impact Your Life Insurance Policy.

    Deborah Middleton

    Navigating the Ethical Landscape of AI: Challenges and Solutions

    Navigating the Ethical Landscape of AI: Challenges and Solutions

    Deborah Middleton

    Managing Your Financials The Right Way – A Startup Guide 

    Managing Your Financials The Right Way - A Startup Guide

    Anna

    A Beginner Guide To The Crypto Analysis Tools.

    A Beginner Guide To The Crypto Analysis Tools.

    Anna

    A Brief Introduction to Scalping

    A Brief Introduction to Scalping.

    Anna

    How to Invest in Stocks: A Beginner’s Guide

    How to Invest in Stocks: A Beginner’s Guide

    Anna

    Tips On Finding Crypto Liquidity Providers In 2023

    Tips On Finding Crypto Liquidity Providers In 2023.

    Anna

    Forex Liquidity in 6 Questions and Tips on How to Become Successful in Trading

    Forex Liquidity in 6 Questions and Tips on How to Become Successful in Trading

    Anna

    A Brief and Comprehensive Guide to Spot Trading.

    A Brief and Comprehensive Guide to Spot Trading.

    Anna

    What is The Difference Between Liquidity Provider and Liquidity Aggregator?

    What is The Difference Between Liquidity Provider and Liquidity Aggregator?

    Tamta

    What Is SWIFT Banking System?

    What Is SWIFT Banking System?

    Tamta

    How Liquidity Providers Drive The Foreign Exchange Market

    How Liquidity Providers Drive The Foreign Exchange Market

    Tamta

    How to Start Investing In Crypto

    How to Start Investing In Crypto

    Tamta

    5 Best Crypto CFD Liquidity Providers 2023

    5 Best Crypto CFD Liquidity Providers 2023.

    Tamta

    The Power Of Liquidity For Crypto Exchanges

    The Power Of Liquidity For Crypto Exchanges

    Tamta

    Institutional Forex Liquidity Explained: Why Do We Need It?

    Institutional Forex Liquidity Explained: Why Do We Need It?

    Tamta

    What Is Return On Investment (ROI), And How Can You Calculate It?

    What Is Return On Investment (ROI), And How Can You Calculate It?
    Latest News - Liquidity Provider: Business & FinTech Media
    • News
      • Stocks
      • Banks and Finance
      • Companies
      • Crypto
      • Forex
      • AI
      • Technology
      • DeFi
      • NFT
    • Articles
      • Crypto Payments
      • Trading
      • Crypto Exchange Business
      • Forex Business
      • Fintech
      • Liquidity
      • FinTech Awards
      • Blockchain
      • Investing
      • NFT
      • DeFi
    • More
      • Videos
      • Liquidity Providers List
      • Crypto Payment Providers
    [email protected]

    © 2023 Liquidity Provider. All Rights Reserved

    Privacy Policy Cookie Policy
    This site is registered on wpml.org as a development site.