Move FM Global News

WASHINGTON D.C.: Potentially hampering US efforts to arm Ukraine against Russia’s invasion, rebuild local infrastructure and boost production, manufacturers of a wide variety of items, including pickup trucks to homes, are still grappling with tight supplies of microchips and cement, causing delays and higher costs.

However, experts warned that while supply chain issues are easing for retail-focused industries, shortages continue in key growth sectors, including automobiles, machinery, defense and non-residential construction.

“For sectors where demand is still strong, we are still seeing issues of materials shortages, and these problems will take additional time to resolve,” noted Jason Miller, associate professor of logistics at Michigan State University’s business school, as quoted by Reuters.

“One of the big issues, as we are trying to ramp up the military industrial base, is having enough electronic components,” he added.

Before starting new production for Ukraine, companies that make weapons, such as Javelin and Stinger missiles, are awaiting US funding, after which their scramble to source semiconductors and other electronic components in short supply could cause a new series of supply chain issues, which could disrupt production and further increase costs.

“Any general shortage in semiconductors will affect defense,” added Brad Martin, director of Rand Corp’s National Security Supply Chain Institute, as reported by Reuters.

Issues have eased in some areas, with supplies of semiconductors for personal computers increasing after sales of new computers decreased as children returned to schools and their parents to offices.

However, an international shortage of cement, a key input for concrete used to build bridges, highways and factories, could slow federally-funded infrastructure projects and US-led semiconductor and green energy factory programs.

Additionally, ongoing demand for auto and farm equipment has decreased stocks of microchips that act as electronic brains in that machinery.