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US government warns that chip supply crunch remains dire

According to the US Department of Commerce, the global computer chip shortage remains an ongoing economic weakness.

Google quantum computer Sycamore chip components
The global chip shortage shows no signs of improving.
Stephen Shankland/CNET

The global computer chip shortage won't end anytime soon, according to analysis from the US Department of Commerce. A new report issued Tuesday by the department outlines the fragility of the worldwide semiconductor supply chain. Specifically, the main issue lies in the factories producing the chips. The DOC estimates that chip plants are churning along at 90% capacity or above.

Other problems the report highlights are bottlenecks in raw materials and skyrocketing demand; the DOC calculates that demand was as much as 17% higher in 2021 than in 2019. 

Others have warned before about this shortfall. Qualcomm CEO Cristiano Amon told CNET last March that he expected the problem to last through 2021, which turned out to be a lowball.

The government does offer a solution to this mess, which has impacted everything from pickup trucks to game consoles. The DOC calls out the need for expanding domestic semiconductor production with President Joe Biden's proposed $52 billion spending package.

"The semiconductor supply chain remains fragile, and it is essential that Congress pass chips funding as soon as possible," said Secretary of Commerce Gina Raimondo in a statement. "With sky-rocketing demand and full utilization of existing manufacturing facilities, it's clear the only solution to solve this crisis in the long-term is to rebuild our domestic manufacturing capabilities."