U.S. Companies Down to Five-Day Supply of Key Chips, Report Says

Commerce Secretary

Gina Raimondo

said the survey results show the urgency for Congress to approve the U.S. Innovation and Competition Act, which includes $52 billion to boost domestic chip production.

“We aren’t even close to being out of the woods as it relates to the supply problems with semiconductors,” Ms. Raimondo told reporters Tuesday. “The semiconductor supply chain is very fragile and it’s going to remain that way until we can increase chip production.”

Since September, the Commerce Department has sought detailed industry data from the major companies in the semiconductor supply chain. Its report was based on a survey of companies, including material and equipment providers, semiconductor manufacturers and automotive, industrial and health care companies that need chips for their products.

The thin inventories are a source of particular concern because of how a single shutdown can then ripple through the supply chain. With these wafer-thin inventories, a closure of an overseas factory earlier in a company’s supply chain, for more than a few days, can cause them to exhaust their inventories.

“This means a disruption overseas, which might shut down a semiconductor plant for 2-3 weeks, has the potential to disable a manufacturing facility and furlough workers in the United States if that facility only has 3-5 days of inventory,” the Commerce Department report said.

The Commerce Department released its findings as part of a push to revive the U.S. Innovation and Competition Act.

—Alex Leary contributed to this article.