Chipmakers struggle to meet demand amid global shortage: ‘It’s extremely complex’

As a global chip shortage continues to strain demand, experts are urging the government to help U.S. makers make more chips.

Demand for crisps surged during the pandemic, and production disruptions and supply chain issues have made it difficult for suppliers to keep up. A recent Commerce Department report found that chip demand in 2021 was 17% higher than in 2019.

CBS News correspondent Meg Oliver visited a microchip production facility in upstate New York that is trying to ramp up production. GlobalFoundries, which is about 20 miles north of Albany, produces about a million chips a day, but demand is so great the company says it needs to produce at least 10 times more than that.

“It’s extremely complex, and as capacity demand increases, so does the complexity,” said Christopher Belfi, the company’s equipment engineering manager, describing the delicate production process.

Chips are needed for almost all devices, including laptops, home appliances like refrigerators, game consoles, and medical equipment. The United States produces about 12% of the world’s supply and has relied heavily on chips produced in Asia. But when the pandemic hit, it shut down major production plants, reducing supply.

“We don’t want to rely on foreign entities to be able to give us the brains and guts of what drives our vehicles, our devices and our cellphones on a daily basis,” Belfi said.

There is renewed interest in producing more chips at home, as some experts warn that not doing so could also be a national security risk. The House of Representatives is currently considering the Chips for America Act, which would provide US manufacturers with $52 billion in funding to help boost domestic production.

“Well, I think it starts with security first and foremost,” said GlobalFoundries CEO Tom Caulfield. “The second is, think of the economic activity that a manufacturing plant brings to the United States. We employ over 3,000 people at that site.”

Experts estimate the shortage of fleas cost the US economy an estimated $240 billion Last year. And it could be years before the shortage is over.

“I would like to be more optimistic and tell you that just around the corner, help is on the way,” Caulfield said. “Just the complexity of the technology that it takes years to build a capability on. And I think for most of the next five to 10 years we’ll be chasing supply in this industry, not demand.”

Caulfield says they will continue to try to meet demand, but they need private investment and federal funding through the chip bill. The House and Senate have passed their own versions of the Chip for America Act, and while there appears to be bipartisan support, there’s no agreement yet — and therefore no funding.

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