Despite having recently experienced its fastest annual growth in nearly four decades, the U.S. economy continues to be hamstrung by an ongoing shortage of the computer chips that are at the heart of everything from medical devices to automobiles, according to the AP.
What’s happening: “The problem has been building since pandemic-related lockdowns shut down major Asian chip factories more than two years ago. Now it threatens to extend into the indefinite future, despite the semiconductor industry’s efforts to catch up with demand.”
- Earlier this month, the U.S. House of Representatives passed the America COMPETES Act, legislation that included funding for the CHIPS Act, a measure that promises to inject $52 billion into the semiconductor industry and its ecosystem, a top Biden administration priority.
- The European Union last week unveiled its own plan to bolster microchip manufacturing.
Why it’s problematic: The shortages, compounded by a pandemic-spurred increase in goods demand, have led to skyrocketing automobile prices, shuttered car and truck plants, increased inflation and delayed production of medical devices, cell phones, computers and other electronics.
- “‘We are so far behind,’ [U.S. Commerce Secretary Gina] Raimondo told reporters Friday. ‘We’re in such a dangerous place as a matter of national security just because of our reliance on Taiwan for our most sophisticated, leading-edge chips.’”
Is relief on its way? “There are some glimmers of hope, particularly in the auto industry. When General Motors released its most recent quarterly results, CEO Mary Barra said the chip supply is looking better in the U.S. and China than it did a year ago, leading the automaker to predict record operating profit this year.”
The NAM says: “The inclusion of CHIPS Act funding in COMPETES will help unleash strategic manufacturing activity, and now we need to get this legislation over the final finish line so that critical next steps to improve U.S. supply chain resiliency can begin,” said NAM Vice President of Infrastructure, Innovation and Human Resources Policy Robyn Boerstling. “We look forward to continuing to work with Congress to finalize their work in support of our semiconductor manufacturing capabilities.”
Shareable resource: The NAM and The Manufacturing Institute’s Creators Wanted campaign—the aim of which is to inspire, educate and empower the next generation of creators—broke down the chip shortage for teen audiences and emerging workers in this on-demand episode. It helps show future creators why the focus on chips means more jobs here in the United States.