Biden orders investigation into semiconductor shortage hitting console production
Wider review seeks to address vulnerabilities in supply chains of key products
President Biden has signed an executive order designed to improve supply chains for “critical and essential goods” including semiconductors.
The order launches a 100-day review to address vulnerabilities in the supply chains of four key products: pharmaceuticals, critical minerals, semiconductors, and large capacity batteries such as those used in electric vehicles.
The share of global semiconductor manufacturing capacity in the US has fallen from 37 percent in 1990 to 12 percent today, according to the Semiconductor Industry Association.
The organisation, which recently called on the Biden administration to offer “substantial funding for incentives for semiconductor manufacturing”, welcomed the signing of the executive order on Wednesday.
Console manufacturers have struggled with stock shortages for a year now, after the Covid-19 pandemic shut down essential supply chains and demand for gaming devices increased significantly as countries introduced stay-at-home orders.
In particular, the recently released PlayStation 5 and Xbox Series X/S consoles have been incredibly difficult to secure, with most restocks selling out within minutes.
A recent Bloomberg report suggested the current semiconductor shortage could see games console stock struggles last until Christmas.
It cited anonymous sources within supply chains, who claimed that “smaller-volume” buyers of semiconductors such as video games companies were losing out to tech giants in the race to secure parts.
AMD, which makes the chips inside PS5 and Xbox Series X/S consoles, recently forecast supply issues through the first half of 2021.
This week Sony Interactive Entertainment CEO Jim Ryan refused to guarantee the company will be able to satisfy PS5 demand by the 2021 holiday sales season, noting in an interview with the Financial Times that “there are very few magic wands that can be waved,” although he said the supply situation will improve throughout the year.
“It will get better every month throughout 2021,” Ryan said. “The pace of the improvement in the supply chain will gather throughout the course of the year, so by the time we get to the second half of [2021], you’re going to be seeing really decent numbers indeed.”
Microsoft’s head of investor relations, Mike Spencer, has said the company expects Series X/S shortages to persist until the second half of 2021.
Earlier this month, Nintendo president Shuntaro Furukawa told investors that semiconductor procurement conditions would have “only a minor impact” on the company’s earnings for the current fiscal year ending in March 2021.
Further reading
Sony says it underestimated PS5 demand but production is ‘ramping up steadily’
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