The car chip shortage, explained

If you’ve been looking for a new or used car lately – or you’ve been paying attention to the news at all – you’re probably aware that there’s a chip shortage going on. Namely, a car chip shortage. How did it start, and why is it affecting the automotive industry in particular? Toyota of N Charlotte is here with all of the info you need on the car chip shortage.

car chip shortage

What are car chips?

Before we talk about the car chip shortage, we need to discuss what the chips are themselves so you can better understand the shortage. Here’s the basic breakdown:

  • Car chips are also called semiconductor chips or microchips. They’re the brain in modern electronics – they work as a type of electrical circuit to control the flow of electrons.
  • They’re typically made of silicon and have a series of tiny transistors that help to control that aforementioned flow of electrons. The chips are small, too – to give you an idea, the chip transistors are about 10,000 times smaller than a human hair.
  • The chips vary a lot in terms of complexity, which makes them super versatile. You’ll find them in things as small as electric toothbrushes all the way up to the advanced safety technology in your new N Charlotte Toyota.
  • It’s a very complex process to create even one chip. A basic chip takes close to 12 weeks to create, while a more advanced one can take up to 20 weeks to create. On top of that, there are only a few semiconductor chip plants in the world.
  • And while you may think that the solution is as simple as opening up more chip plants, it’s not that easy. Opening a new plant requires years of time and billions of dollars.
  • Unfortunately, the COVID-19 pandemic disrupted both production of the chips AND global shipping, which ultimately led to the car chip shortage.

But why has the automotive industry in particular been so affected by the chip shortage? Here are the two main reasons a car chip shortage came out of this mess.

Two reasons a car chip shortage is taking place

Number one: Modern cars are much more technologically advanced than previous generations of vehicles. This means that for all of that entertainment, safety, and performance tech you want in your N Charlotte Toyota, you’re going to need quite a few car chips.

Number two: The COVID-19 pandemic totally messed up forecasting for goods. Back in March of 2020, shutdowns and quarantines kicked off. Automotive manufacturers figured that this would lead to a lower demand for new cars; due to that assumption, they forecasted fewer sales and as such, canceled chip orders. Unfortunately, they were wrong. Demand dropped temporarily, but it bounced right back up… and the car chips weren’t there, which means the car chip shortage began.

When will we see the end of the car chip shortage?

So, when will this car chip shortage end? Unfortunately, we don’t really know. Some forecasters believe the middle of 2022 will start to see normalcy, while others are saying it’s more likely that the car chip shortage will end in 2023. What we do know is that we have multiple trucks of new Toyotas arriving every single day. You can shop in person and still get a great selection and not only that, you can pre-order your next new Toyota and pick it up when it arrives.

Ready to shop for a new car? Call us today at Toyota of North Charlotte – we’re open until 10 pm at (704) 875-9199, and you can always stop by 13429 Statesville Road, just off I-77 at exit 23 in Huntersville. You can also shop online 24 hours a day!