US Commerce Department report highlights alarming chip inventory levels

Shawn Knight

Posts: 14,127   +154
Staff member
In brief: The US Department of Commerce last year requested information from the semiconductor supply chain to get a better understanding about the ongoing chip shortage. The department received more than 150 responses and shared some of what it learned this week.

The Commerce Department found that among 25 immediate / end users of semiconductors, median inventory levels had dropped to fewer than five days by September 2021. For comparison, the figure was closer to 40 days in 2019 before the pandemic.

Of course, we’re looking at data that is now at least four months old, so make of it what you will.

Above all, the Commerce Department notes that the semiconductor supply chain remains fragile due to limited wafer production capacity. The biggest challenge continues to be trying to balance supply and demand, but companies also identified other bottlenecks relating to things like packaging capacity and assembly.

Semiconductor makers are doing their best to address the issue, but it’s not one that can be solved overnight. Since Q2 2020, quarterly fab utilization has stayed above 90 percent; it didn’t even touch 80 percent in Q1 2019.

Companies are also throwing large amounts of money at the problem, building new fabs as quickly as possible. Intel just days ago said it would spend more than $20 billion to construct two new chip factories in Ohio. Construction will begin by the end of the year with production expected to come online in late 2025.

Image credit: Tima Miroshnichenko, Cottonbro

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Posts: 2,202   +4,235
The entire character of the discussions radically changes when it comes from a branch of the US Government: imho it ceases to be merely a business concern and becomes a not-so-subtle jingoistic jab at China to try and continue the (utterly useless and completely irrealistic) policy of trying to move some of what they consider "strategically important" parts of the electronics manufacturing chain into a more friendly ally if not the US itself.

Ultimately however, they just want to keep people worried about electronics to potentially justify future, more aggressive actions.


Posts: 597   +500
It is funny that countries and companies are throwing money at building fabs, but yet the fabs require raw material to produce the chips. So I am not sure if doubling down on increasing fabs will solve the issue. Assuming the number of fabs/ capacity doubles, but yet the raw material supply can't keep up, these fabs will just sit idle.

Bullwinkle M

Posts: 709   +600
We don't need new fabs to fix this

Just stop making chips for garbage devices and spyware/monopolyware ****

We have more than enough capacity to produce chips that only benefit "THE END USER"