US updates semiconductor supply chain alert system

03 October 2023

In its continued effort to minimize chip supply chain disruptions, the Biden Administration has updated its semiconductor alert mechanism.

The system will be managed by International Trade Administration (ITA) and work with trading partners and chipmakers in the private sector to recognize shutdowns and disruptions to semiconductor manufacturing facilities and other facilities in the U.S. and across its trading borders.

“Supply chains are crucial to businesses and consumers alike," said Heather Evans, U.S. Deputy Assistant Secretary for Manufacturing. "The Semiconductor Alert Mechanism provides a platform to hear directly from industry stakeholders when they are experiencing disruptions. We encourage companies to use this tool to share critical information in order to strengthen and secure our nation's supply chains."

The semiconductor alert mechanism would allow manufacturers, governments and others in the supply chain to gain insight into the health of the supply chain and if problems are emerging in areas of the U.S. or its cross-border semiconductor partners, the U.S. Department of Commerce (USDOC) said.

Having this information will help the government and chipmakers to detect and assess bottlenecks and then mobilize and coordinate resources to reduce chokepoint risks. The system is a public-private information gathering mechanism that is aimed at helping experts coordinate with other partners and the private sector.

Why it matters

During the initial months of lockdowns and social distancing due to the COVID-19 pandemic, the semiconductor supply chain was sent into disarray as foundries and integrated device manufactures (IDMs) had to switch product balances to sectors surging rather than those predicted to be stagnant.

Because of this, many sectors were left scrambling to find enough semiconductors to make products due to the mix of products being located elsewhere. This included the automotive semiconductor segment that was hit especially hard by the supply chain shortage. This resulted in many vehicle models being postponed or not as many manufactured during the COVID years.

The direct result was an impact on the financial situation of all automotive OEMs. But it also gave automotive OEMs the extra incentive to establish their own semiconductor deals either directly with chipmakers or with foundries and other IDMs.

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