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How will the chip shortage be solved?

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Posted at 9:51 AM, May 23, 2022
and last updated 2022-05-23 11:51:45-04

DENVER, Colo. — Computer chips were one of the first things to be disrupted by supply chain snags when the pandemic began. The shortage is still going on more than two years later, and it is slowing or stopping production of everything from healthcare equipment to video games.

However, it doesn't stop there— research by Goldman Sachs estimates at least 169 industries have been impacted.

“Literally, it's affecting everything. Anything electronic has evolved to a place where they can throw a chip in there to make it do whatever. And without that chip, production stops,” said Todd Sigaty, who runs Mike’s Camera in Denver, Colorado.

Sigaty said the photography industry is stuck at a standstill waiting for chips.

“Sony has actually discontinued a couple of models because they can't, they don't have enough chips to support their current product or new product,” Sigaty said.

Now, experts are warning shoppers to beware of counterfeit chips hitting the market. Toys, video games and cameras can be at high risk for counterfeit chips.

There are a number of steps you can take when purchasing products to avoid purchasing counterfeit chips.

  1. Make sure you’re buying from a reliable source.
  2. Request or check to see if the item has a chip accreditation number.
  3. Make sure there is a return policy in case the item doesn’t work.

If you’re wondering how this shortage got so bad, it’s all about supply and demand.

The United States accounts for nearly half of global chip sales, but Taiwan and Korea account for 83% of global chip production.

But a solution could be on the way. Members of the House and Senate are currently negotiating their own versions of a bill called the Bipartisan Innovation Act to boost America’s chip industry. Both chambers have support from President Joe Biden.

The bills would spend more than $52 billion on chip production and research in the United States to prevent future shortages and put the U.S. on pace to match china’s production. They would also establish regional technology hubs to bring high-tech jobs into places they weren’t before and increase manufacturing power in the United States.

The biggest question on everyone’s mind is when will this end? Supply chain experts expect production to start stabilizing at the beginning of next year, but it could be as long as two years from now before products on back order today become easily available. It could take a full decade before production in the U.S. is up and running.