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

The ongoing global chip shortage has had a huge impact on the computer hardware market. Many of us look 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 has conducted a global survey of more than 150 companies in the semiconductor supply chain, and the results of the survey are quite clear: supply is still far too small to meet current market demand.

The new Nvidia GeForce MX570 chip.

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

“There is a significant, ongoing mismatch in chip supply and demand, and respondents did not see the problem go away over the next six months,” Raimondo said, quoted by Reuters.

The survey was voluntary and many companies chose to participate in the fall of 2021. According to Raimondo, the companies surveyed span the entire supply chain. Some companies and governments would be hesitant to participate in the study. However, the United States Department of Commerce has the authority to obtain the required information from companies operating in the United States.

The numbers only confirm what we’re seeing amid the GPU shortage: While demand has risen significantly over the past two years, chip supply hasn’t been able to meet it. According to Raimondo, the demand for chips in 2022 is now about 20% higher than in 2019.

To meet rising expectations, the median stock for key chips has fallen dramatically from 40 days in 2019 to less than five days in 2021. Raimondo points out that this leaves little room for error, as the smallest problems can cause huge delays in an already difficult time.

An engineer smiles while holding up two processor chips.

On the upside, the survey revealed no evidence of hoarding, but some prices appear to be too high and the Department of Commerce is going to review them. It will also continue to reach out to businesses and collect data. According to Reuters, the House Democrats are about to spend $52 billion on semiconductor manufacturing and research. The financing was already approved last June. This underlines how much the administration is committed to combating the persistent shortages, which affect not only the computer market, but also cars and mobile phones.

Now that many PC builders can’t get a new graphics card, new reports seem to surface daily about the possible end date of the shortage. The last we heard, there can be light in the dark for at least two reasons.

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

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