Chad P. Bown
During the COVID-19 pandemic, demand for semiconductor chips, a key component of all electronics, skyrocketed as many jobs and crucial services moved online and workers upgraded their home offices. Combined with major supply disruptions, the result has been a worsening semiconductor shortage. In May, wait times for chip orders stretched to 18 weeks, four weeks longer than the previous peak. The supply crunch has hit a range of sectors. Automotive plants have idled as they await delivery of chips used in their cars. Makers of microwaves, refrigerators, and washing machines have been unable to fill their orders. Long the obscure concern of experts in the technology sector, semiconductor supply chains have now been thrust into the spotlight.
But the supply of semiconductors was at risk long before the pandemic, and the virus is only partly to blame for today’s shortages. One of the biggest culprits was a sudden shift in U.S. trade policy. In 2018, motivated by national security concerns, the Trump administration launched a trade and tech war with China that jolted the entire globalized semiconductor supply chain. The fiasco contributed to the current shortages, hurting American businesses and workers. Now, the Biden administration must pick up the pieces.
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