President Biden has signed an executive order that will begin a review of the vital supply chains involved in semiconductor production.
A global semiconductor shortage is hampering important hardware production, most notably affecting the production of new gaming consoles like the Xbox Series X and PlayStation 5 and new CPUs, smartphones, and more.
President Biden Wants to Know About Semiconductors
The executive order directs the government to initiate a 100-day investigation and review into the supply chains of four key product types, including semiconductors and large batteries. Moreover, the review will consider the US's dependency on China and other countries to import and provision vital products, many of which are not produced on US soil.
Last week, a semiconductor lobbying group wrote to President Biden urging him to take action against the dependency on foreign manufacturing and to "work with Congress to reinvigorate semiconductor manufacturing in the United States." You can read a full copy of the lobby group's letter here.
While the governments of our global competitors have invested heavily to attract new semiconductor manufacturing and research facilities, the absence of U.S. incentives has made our country uncompetitive and America's share of global semiconductor manufacturing has steadily declined as a result.
In a short speech before signing the executive order, President Biden agreed with the sentiment of the letter, stating, "We need to stop playing catch up after the supply-chain crisis hit. We need to prevent the supply chain crisis from hitting in the first place."
Not many would disagree, even in the face of the slowly emerging post-COVID 19 world.
Semiconductor Shortages Hit Console, CPU, & GPU Production
Have you tried to purchase either an Xbox Series X or S or a PlayStation 5 since its launch? How about the highly-rated Nvidia 30-series GPUs?
There are other pressures on these two types of hardware, such as scalpers or cryptocurrency mining operations, but at the root of the global shortages is semiconductor production. Quite simply, not enough semiconductors are being produced to cope with demand.
Foundries are overwhelmed. Analysis released this week by TrendForce found that semiconductor demand is currently around 30 percent higher than supply, with year-on-year growth of 20 percent.
The future reallocation of foundry capacities still remains to be seen, since the industry-wide effort to accelerate the production of automotive chips may indirectly impair the production and lead times of chips for consumer electronics and industrial applications.
Although the review into semiconductors won't magically increase production, it will help prepare for changes to these vital products' supply chain, be that bringing more production onto US soil or the next global event to cause disruption.