Washington, Jan. 25 (BNA): The US Department of Commerce said on Tuesday that the supply of computer chips in the US has fallen to alarmingly low levels, raising the possibility of factory closures.
Stocks of companies that use semiconductors have fallen below five days — a sharp drop from 40 days in 2019, according to a management survey of 150 companies.
Chips used to make cars and medical devices are particularly rare, according to the Associated Press.
The department said demand for chips rose 17% last year compared to 2019.
Citing the findings, the Biden administration has called on Congress to pass stalled legislation that would save $52 billion for domestic semiconductor production.
“The semiconductor supply chain remains fragile, and it is imperative that Congress pass funding for the chips as quickly as possible,” Commerce Secretary Gina Raimondo said in a statement.
“With demand skyrocketing and full use of existing manufacturing facilities, it is clear that the only long-term solution to this crisis is to rebuild our local manufacturing capabilities.”
Chip shortages have disrupted auto production and driven up auto prices, contributing significantly to a 7% year-over-year increase in consumer prices last month — the highest inflation in four decades. However, it will take years for the semiconductor factories to start operating.
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