US Firms' Microchips Inventory Down To Less Than 5 Days - Commerce Dept.

WASHINGTON (UrduPoint News / Sputnik - 25th January, 2022) US manufacturers have less than five days of inventory for essential microchips, according to a government survey that Commerce Secretary Gina Raimondo used on Tuesday to urge that semiconductor supply chains broken in the aftermath of the coronavirus pandemic are quickly fixed.

In 2019, US companies maintained 40 days of inventory for key chips needed for 160 products but now their stockpiling was less than an eighth of that, the Commerce Department said in its survey.

"The... findings confirm the urgent economic and national security need for Congress to pass USICA (US Innovation and Competition Act), which includes $52 billion to incentivize making chips in (the) Flag of (the) United States," Raimondo said via Twitter.

The USICA authorizes some $110 billion for basic and advanced technology research over a five-year period, including a $52 billion incentive for more US companies to build their manufacturing facilities that incorporate semiconductor plants.

With the US economy emerging from the 2020 COVID-19 pandemic, a dire shortage of chips has crippled auto manufacturing and slowed the rollout of electronic products.

The Commerce Department's latest survey shows the crisis was likely to get worse before it gets better.

"This means a disruption overseas, which might shut down a semiconductor plant for 2-3 weeks, has the potential to disable a manufacturing facility and furlough workers in the United States if that facility only has 3-5 days of inventory," the Commerce Department said.

The survey focused on companies, material and equipment providers, semiconductor manufacturers and automotive, industrial and healthcare firms that need chips for their products.