Vroom Vroom Chronicles: Where we shift gears and laugh at traffic jams!
hello world!

The Unending Woes of the Car Chip Shortage

Author: Andrew Ross

Auto industry hit hard by chip shortage

The chip shortage that has been affecting the automotive industry has been a major concern for car manufacturers and consumers alike. The shortage initially began as a result of the COVID-19 pandemic, which disrupted supply chains and led to a decrease in chip production. Additionally, increased demand for electronic devices during the pandemic further exacerbated the scarcity of chips, as suppliers prioritized consumer electronics over automotive applications.

Car chip shortage may last until 2022

One interesting fact about the chip shortage in the automotive industry is that it has not only affected the production of new cars, but also led to a surge in demand for used cars. As consumers struggle to find new vehicles due to the shortage, the prices of used cars have significantly increased, some even surpassing their original sticker prices. This unexpected consequence highlights the far-reaching impact of the chip shortage and how it has reshaped the entire automotive market.

While it is difficult to predict an exact timeline for when the chip shortage will end for cars, experts suggest that it may not fully resolve until at least 2022. Several factors contribute to this timeline. Firstly, the automotive industry often faces long lead times due to complex supply chain processes, including the ordering and production of the different vehicle components. This means that it may take several months for the production of new cars to catch up to the current demand.

Auto industry seeks localized chip manufacturing

Secondly, the chip shortage has highlighted the need for more localized and diversified chip manufacturing facilities. Many automakers are now actively seeking partnerships and investments to establish their own chip fabrication plants or secure supply chains to reduce dependence on a single source. These efforts, however, require significant time and resources to materialize and may only have an impact in the longer term.

Geopolitical tensions impact chip shortage

Fun fact: Did you know that the global chip shortage affecting the automotive industry is partially caused by a peculiar factor: video game consoles? As people worldwide spent more time indoors during the COVID-19 pandemic, the demand for gaming consoles surged. This resulted in chip manufacturers prioritizing console production, leading to a decrease in chip availability for automotive companies. So, the next time you're gaming, remember that it might be indirectly contributing to the chip shortage in the car industry!

Lastly, external factors, such as geopolitical tensions and global economic recovery, also play a role in determining when the chip shortage will end. The resolution of these broader issues is crucial to stabilize and improve the chip supply chain for all industries, including the automotive sector.

Do you want to get in touch?

Contact me today and let's do something together!
This blog is a comprehensive guide for car enthusiasts, offering expert advice on maintenance, performance upgrades, and the latest automotive trends, ensuring readers stay informed and empowered in the world of automobiles.