The Biden administration has concluded that a global semiconductor shortage will persist until at least the second half of this year, promising long-term strain on a range of U.S. businesses including automakers and the consumer electronics industry.
U.S. officials plan to investigate claims of possible price gouging for chips used by auto and medical device manufacturers, Commerce Secretary Gina Raimondo said Tuesday.
“We aren’t even close to being out of the woods as it relates to the supply problems with semiconductors,” Raimondo said in a briefing with reporters discussing the findings of an industry report her agency conducted that was released Tuesday.
The report, based on information from more than 150 companies in the chip supply chain, shows “there is a significant, persistent mismatch in supply and demand for chips.” The companies don’t see the problem being solved in the next six months, according to the report.
The Commerce report highlights the limited options available to the Biden administration as it tries to respond to the crisis, which has caused production delays for electronic devices and furloughs in the auto industry. The chip shortage is also a key driver of higher inflation, which has bedeviled President Joe Biden’s White House and threatens to help swing Congress to Republican control in November’s midterm elections.