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Will the chip shortage end soon? Biden’s team has bad news

The ongoing global chip shortage has had an enormous impact on the computer hardware market. Many of us are looking forward to a time when things will get better, but according to the Biden administration, the situation will remain dire for at least the rest of 2022.

The United States Commerce Department conducted a global survey of over 150 companies within the semiconductor supply chain, and the results of the survey are pretty clear: The supply is still far too short to meet the current market demand.

The new Nvidia GeForce MX570 chip.
Image used with permission by copyright holder

According to Commerce Secretary Gina Raimondo, the surveyed companies do not foresee the problem going away in the near future. While there has been conflicting speculation about the possible end of the chip shortage, the Biden administration seems convinced that we are far from an end.

“There is a significant, persistent mismatch in supply and demand for chips, and respondents did not see the problem going away in the next six months,” said Raimondo, as quoted by Reuters.

The survey was voluntary and many companies chose to take part in it during the fall of 2021. According to Raimondo, the surveyed companies span across the entire supply chain. Some companies and governments were allegedly hesitant to take part in the survey. However, the U.S. Commerce Department has the power to obtain the required information from those businesses that conduct operations within the United States.

The numbers only confirm what we’re all seeing in the midst of the GPU shortage: While the demand has gone up significantly in the past two years, the chip supply has been unable to meet it. According to Raimondo, the demand for chips in 2022 is now around 20% higher than it was in 2019.

To meet the rising expectations, the median inventory for key chips has gone down drastically: From 40 days in 2019 to less than five days in 2021. Raimondo points out that this leaves very little room for error, as the smallest problems can cause massive delays during an already difficult time.

An engineer smiles as she holds up two processor chips.
Image used with permission by copyright holder

One upside is that the survey didn’t reveal any evidence of hoarding, but some prices do appear to be inflated and the Commerce Department is going to review them. It will also continue reaching out to companies and collecting data. According to Reuters, House Democrats are about to spend $52 billion on semiconductor production and research. The funding has already been approved last June. This highlights how much the administration wants to combat the ongoing shortages, which affect not just the computing market, but also cars and mobile phones.

With many PC builders unable to get their hands on a new graphics card, new reports about the possible end date of the shortage seem to pop up daily. Last we heard, there may be some light in the dark for at least two reasons.

Due to the current cryptocurrency crash, the demand for mining cards may drop. In addition, inside sources recently reported that the GPU shortage may stabilize as early as this summer, thanks to an improvement in the supply of ABF substrate. It remains to be seen whether these claims prove to be true and things will slowly start getting better, or if the Biden administration’s estimates are correct and we will have to wait longer.

Monica J. White
Monica is a UK-based freelance writer and self-proclaimed geek. A firm believer in the "PC building is just like expensive…
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