The global chip shortage that’s kept automobiles, iPads and game consoles in short supply is nothing compared to what could happen if the global economy’s key maker of high-end microchips, based in Taiwan, is jeopardized.
Why it matters: Till now, Washington’s focus on the semiconductor shortage has centered on keeping products on shelves and car dealership lots stocked — but U.S.-China tensions, along with the threat of natural disasters, provide a recipe for an even broader economic crisis.
What’s happening: Right now, no U.S. company can manufacture the most advanced leading edge chips used in smartphones, laptops, servers, supercomputers, gaming consoles and other products.
What they’re saying: “It’s extreme concentration of some of the most strategically important chips in the world, and no capacity in the United States in the case of major disruptions,” Will Hunt, a research analyst at Georgetown’s Center for Security and Emerging Technology, told Axios.
Yes, but: Intel recently announced plans to invest $20 billion in two leading-edge chip factories in Ohio, while TSMC is building a facility to make its five-nanometer chips in Phoenix.
Meanwhile, the chip shortage experienced by the auto industry is for older, less advanced chips and is being fueled by a mismatch in demand and supply.
What’s next: House lawmakers introduced legislation that could see a vote as early as this week that would in part dedicate $52 billion in funding for domestic semiconductor production.
Between the lines: The funding, which the Senate approved last year, is meant to address long-term chip challenges, not the short-term crisis.