How to Interpret Chip Supply Chain Data

By the Numbers

By George Leopold, EETimes (February 1, 2022)

The press release issued by the U.S. Department of Commerce on Jan. 25 declares: “Commerce Semiconductor Data Confirms Urgent Need for Congress to Pass U.S. Innovation and Competition Act.”

Not quite. Mostly, the government data confirms ongoing technology supply chain disruptions, semiconductors being the leading indicator. The industry survey found that fabs are operating full-blast as pandemic-driven demand for chips has risen 17 percent since 2019.

The supply-demand imbalance is also reflected in manufacturers’ inventories: The semiconductor supply chain report also reveals that median inventory among U.S. automakers and consumer electronics manufacturers has shrunk to less than a five-day supply from 40 days in 2019.

“The main bottleneck identified is the need for additional fab capacity,” the survey concludes. “In addition, companies identified material and assembly, test and packaging capacity as bottlenecks.”

That’s hard data, underscoring the direct economic impact of supply chain disruptions. But the findings do not on their own confirm, as Commerce Secretary Gina Raimondo asserted, the need for Congress to immediately approve $52 billion to accelerate domestic semiconductor production.

Cast as a statement of fact, Raimondo’s interpretation of the supply chain data is typical of the industry cheerleading in which commerce secretaries often engage. It’s their job.

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