Washington, meanwhile, zeroes in on the supply of semiconductors.
It’s been over a week since they freed that cargo ship that jackknifed in the Suez Canal. One of the world’s busiest shipping lanes is open again and the story has left the news cycle, although the guy who was operating that lone excavator trying to get one of the world’s largest boats unstuck says he hasn’t been paid!
What gives?! Pay this man!
Anyway – the Suez Canal getting blocked is the kinda story can focus everyone’s attention on something like the fragility of global commerce and the risk that comes with long supply chains. But we’ve been dealing shortages for a while now, as the covid-19 pandemic has idled manufacturing facilities while simultaneously increasing demand for all kinds of stuff (really, all kinds of stuff).
Like, for example, everyone is familiar with the shortages of personal protective equipment for health care workers. But it’s also shortages of household appliances, which in turn slows up new home sales, and semiconductors, where a production bottleneck at chip foundries in Taiwan is in turn idling production lines at auto plants in North America right now.
It’s unclear if they’re gonna figure out how to get more fridges and microwaves made post haste, but the Biden administration has taken notice of the semiconductor shortage. The chips are the focus of a high-level meeting at the White House next week, which figures – six weeks ago President Biden ordered reviews of the supply chains for semiconductors and a handful of other products deemed critical to national security, all of which are in short supply thanks to the pandemic. Funding for semiconductor manufacturing and research is also included in the president’s big infrastructure pitch, and a separate legislative proposal for semiconductor funding is getting a hearing before the Senate Commerce Committee next week.
The auto industry is already asking the government for help in securing a supply of chips – and while the government should encourage chip manufacturing to take place in the United States, standing up a semiconductor foundry isn’t something that happens overnight. It’ll be interesting to watch how this story develops and how this problem is hopefully solved. These chips are necessary components in lots of products, and the shortages of them could last for months.