WASHINGTON (WBEN/AP) - "It is turning out to be a crisis," said University at Buffalo Distinguished Professor of Management Nallen Suresh, discussing the global shortage in semiconductor computer chips. "Unless we address this supply constraint very quickly, that is over the next few months, it could get out of hand and naturally cripple the economic growth we are anticipating."
Last week, President Joe Biden held a virtual meeting with corporate leaders to push for his $2.3 trillion infrastructure plan, telling them that the U.S. should be the world's computer chip leader.
"We need to build the infrastructure of today, not repair the one of yesterday," he told the group of 19 executives from the technology, chip and automotive industries. "China and the rest of the world is not waiting and there's no reason why Americans should wait."
He said the country hasn't made big investments to stay ahead of global competitors, and it needs to step up its game. The meeting came as the global chip shortage continued to plague a wide array of industries.
CEOs of AT&T, Dell, Ford, General Motors, Stellantis (formerly Fiat Chrysler), Intel, Northrop Grumman, and others were scheduled to attend.
Suresh explained the chips shortage has been caused by a sort of perfect storm of events, including geo-political tensions with China and then, of course, the pandemic.
But Suresh also noted several issues in Taiwan - a country responsible for nearly two-thirds of the world's semiconductor manufacturing - as they've been experiencing drought. The semiconductor industry is heavily dependent on water, and this has caused major disruption.
"We found during the COVID year our vulnerability to all of our supply sources being concentrated in China - that came to the surface," said Suresh. "Now we're realizing that so much of the supply concentration is in Taiwan and South Korea, and we need to diversify, and we need to strengthen our domestic manufacturing for semiconductors down the line."
But industry experts say there's little they can do to stem the shortage, which has delayed a new iPhone and forced automakers to temporarily shut factories because they're running short of the multiple computers needed to run engines, transmissions, brakes and other essential features.
Instead, Biden brought up developing a U.S. chip supply chain since most are made in Asia and shipped to the U.S. In February he ordered a review of the supply chain and pledged to work with international partners to ensure stable supplies.
The shortage already has made it harder for schools to buy enough laptops for students forced to learn from home, delayed the release of popular products and created mad scrambles to find the latest video game consoles.
But things have worsened in recent weeks, particularly in the auto industry, where factories are shutting down because there aren't enough chips to finish building vehicles that are becoming rolling computers.
"It is getting a high level of attention, and I'm sure they will solve the problem," said Suresh, emphasizing the urgency of the situation. "But this is potentially a crisis - it has to be addressed immediately."
