Chip shortage will last for next year

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A global shortage of semiconductors will continue to strain markets for months to come, Commerce Secretary Gina Raimondo said Monday.

“For the next year or so, this will be a daily challenge,” Raimondo said on CNBC’s “Closing Bell.”

The scarcity of chips, which are required for an ever-growing variety of products, has already taken a heavy toll on American manufacturing, especially in the automobile industry.

Raimondo’s prediction is rosier than that of some analysts, who believe the shortage or its knock-on effects may still be felt in 2023.

In the meantime, President Joe Biden’s administration is communicating with stakeholders and “encouraging more transparency in the supply chain, better accuracy in the supply chain,” Raimondo said on CNBC.

“We’re trying to help make sure that the demand signal that consuming industries are giving to semiconductor suppliers is accurate, up to date and transparent,” she said, “and really just encouraging the private sector to work together and do everything it can in order to meet the short-term crunch.”

“In that regard, you’re seeing GM reopening some plants, you’re seeing some easing,” Raimondo told CNBC’s Sara Eisen. “But as you predict, for the next year or so, this will be a daily challenge, and we’re going to do everything we can to help the private sector get through it.”

Raimondo also noted that the Senate is poised this week to approve an “enormous” $52 billion in subsidies for chip production as part of a larger bill aimed at increasing U.S. competitiveness with China.

Raimondo, who served as the first female governor of Rhode Island before joining Biden’s Cabinet, also said of ongoing infrastructure talks on Capitol Hill, “I believe there is a chance for progress in a bipartisan deal.”

But “Republicans need to come up, and we need to stay at the table,” she added, noting Biden has already slashed hundreds of billions of dollars from the initial, $2 trillion-plus proposal he put forward earlier this year.

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