Global semiconductor chip shortage worsens, hitting phones, cars, and medical equipment
Global semiconductor chip shortage worsens, hitting phones, cars, and medical equipment

By Nihal Krishan, Technology Reporter

A global semiconductor chip shortage has gotten even worse in the past few months, leading to delays for various products and a significant loss of sales for companies that need the chips for their business.

Semiconductors, which make up essential and expensive parts of modern-day gadgets and cars, have seen an explosion in demand in the past decade and particularly during the pandemic, causing a global shortage.

“The shortages are going to continue indefinitely,” Brandon Kulik, the head of Deloitte’s semiconductor industry practice, told Ars Technica. “Maybe that doesn’t mean 10 years, but certainly, we’re not talking about quarters. We’re talking about years.”

Car companies such as General Motors Co. and Ford halted production lines at multiple factories earlier this year due to the shortage. The shortage has now started to affect other valuable consumer goods, such as smartphones, home appliances, and even medical equipment, the Wall Street Journal reported.

The basic materials needed to build semiconductor chips, such as substrates and wafers, are in drastically short supply due to interruptions from bad weather, fires, and the coronavirus pandemic, all of which have dramatically decreased semiconductor manufacturing by big players such as Intel, Nvidia, and AMD, the Journal reported.

“Trust me, we would be shipping a lot more if we weren’t constrained by the supply chain of these other components in the industry,” Intel CEO Pat Gelsinger said last week on an earnings call for the company. Gelsinger has said he expects the shortages to last until at least 2023.

Semiconductor manufacturers have been begging the federal government to step in and alleviate the chip shortage by providing new funding for the research and development of more semiconductors.

The Senate passed a bill in June with almost $250 billion in new funding for chips, including a $52 billion proposal that would hugely increase the research and production of U.S. semiconductor chips over the next five years and make the country less dependent on unstable foreign sources, such as China.

The Creating Helpful Incentives to Produce Semiconductors for America, or CHIPS, Act has bipartisan support in Congress. It has stalled in the House, however, due to conflicts over non-semiconductor parts of the bill.

“Our strong plea to the House is get the CHIPS Act done, get it funded,” Gelsinger said on Bloomberg Television earlier this week. “Because I know we and others are looking forward to the opportunity to go even faster to rebuild our supply chains, to get more of that back on U.S. soil as a result of this funding.”

Intel has had to delay and potentially reconsider its plans for a multibillion-dollar investment in a new U.S. semiconductor manufacturing plant due to Congress delaying on the funding provided in the CHIPS Act.