Democrats Criticize Trump Administration for Exacerbating Chip Shortage
The Trump administration has been criticized by a top Democrat for exacerbating the global chip shortage. The criticism comes as the US share of global chip fabrication has collapsed from about 37% in 1990 to roughly 10% by 2022, making supply chain experts nervous due to dependency on foreign fabs.
The CHIPS and Science Act, signed into law in 2022, allocated $39 billion to incentivize semiconductor manufacturing on US soil. However, Trump administration officials have floated the possibility of discontinuing these programs, which has unsettled industry stakeholders who had invested billions based on promised federal incentives.
Micron CEO Sanjay Mehrotra warned that there is 'no line of sight' for AI memory chip supply to meet demand, predicting shortages would extend beyond 2027. The primary driver of demand is AI, with hyperscalers like Microsoft, Google, and Amazon hoovering up available chips for training and inference workloads.
The shortage has already affected Bitcoin miners, who faced significant delays in receiving new equipment during the 2020-2023 cycle. Premiums on mining hardware spiked, squeezing margins for operators unable to secure rigs at reasonable prices. This adds to existing concerns about mining profitability after the April 2024 halving.